PH House Panel Approves Bill Expanding Road Tax, Targets Three-Wheeler Type Vehicles

May 14, 2024 11:18 PM EDT

ELECTRIC CAR TRABSPORTATION , THREE-WHEELED TYPES — (Photo : PIXABAY/lifeP)

Philippines - On Tuesday, a bill was approved by a House of Representatives committee to expand the road users' tax coverage to encompass specific categories of unique three-wheeled vehicles. This move is projected to result in a revenue increase of P17 billion for the government in the upcoming four years.

Bill Expanding Road Tax for Three-wheeled Types

As reported by Business World, House Bill No. 10038 proposes that owners of these vehicles will be required to pay a road user's tax of P2,080 in 2024, P2,560 in 2025, and P3,040 in 2026. Subsequent years will see a 5% increment from the 2026 tax rate as per the bill's provisions.

This legislation enacts the tax rates specified in a Land Transportation Office (LTO) memorandum issued four years ago for three-wheeled vehicles falling under the "non-conventional" classification. This group includes single-chassis motor vehicles with three wheels, along with light and heavy quadricycles.

Additionally, the report noted that the chair of the House Ways and Means Committee, Representative Jose Maria Clemente S. Salceda, brought up the LTO's Memorandum Circular No. 2020-2227 as a temporary solution for setting up a framework to impose a road user's tax on non-traditional vehicles that aren't covered by current legislation during the committee hearing.

The report also stated the LTO's decision to release the memorandum was prompted by the increasing presence of unconventional vehicles on the road, with approximately 1.4 million units purchased since 2020, as detailed in the bill's accompanying explanation.

The proposed policy seeks to streamline the taxation structure for non-traditional vehicles by implementing a fixed-rate system. This proposal is rooted in the principle of user-pay, which advocates for road users to bear charges based on the infrastructure wear and tear they generate shared Charmaine B. Odicta, a spokesperson from the Department of Finance, speaking before the panel.

During the panel session, Mr. Salceda challenged the DILG's decision to unilaterally restrict non-conventional vehicles from national roads, particularly questioning the ban on three-wheeled vehicles.

He argued that implementing a road user's tax on such vehicles would enable their access to national roads and expressed concern that the current policy disenfranchises a notable portion of both users and taxpaying vehicle owners, as highlighted in his statement.

National Highways: Ban on Three-Wheeled Vehicles

As detailed by Inquirer, a prominent House lawmaker urged the Department of the Interior and Local Government (DILG) to revoke its directive that prohibits three-wheeled vehicles from operating on national highways.

In a session conducted by the House committee on ways and means, panel chair and Albay Representative Joey Salceda raised concerns regarding the DILG's issuance of Memorandum Circular No. 2020-36, questioning the jurisdiction under which such a prohibition, affecting vehicles such as tricycles and pedicabs, was implemented.

Salceda highlighted that while the memorandum did not explicitly address modern symmetrical three-wheeled cars, distinct from traditional tricycles and pedicabs, its ambiguous nature has led to confusion, particularly in regions with limited transport alternatives.

He expressed concerns that the vague ban was being misinterpreted to restrict non-traditional vehicles capable of traveling on national roads, despite already paying the motor vehicle user's charge (MVUC).

He argued that being subject to the road user's tax should grant these vehicles the right to use the roads. The DILG justified the memorandum under the Local Government Code, which decentralized the regulation of such vehicles to local governments.