IF the government wants to reduce the number of vehicles on the road to address traffic congestion by raising motor vehicle tax, it should fast-track its public transport system projects so that commuters would have viable means of transportation, the chairman of the Senate ways and means committee said on Friday.
Senator Juan Edgardo Angara noted that while he considers the proposal to raise motor vehicle excise tax a good strategy, the government should make sure that it could provide commuters efficient, safe and affordable public transport systems.
“I am one with the goal of making public transport the preferred mode of travel. But the government should speed up the upkeep of MRT and LRT [Metro Rail Transit 3 and Light Rail Transit Lines 1 and 2] to help migrate the ones bringing cars to public transport,” Angara said.
The government, in its tax reform proposal, wants to increase excise taxes on oil and automobiles.
Recently, the House of Representatives passed its version of the reform bill, which aims to lower income taxes while limiting value-added tax (VAT) exemptions and adjusting excise taxes on fuel and motor vehicles.
In order to cushion the impact of the increase in excise taxes on oil, the government plans to put in place a Pantawid Pasada program, which aims to provide cash cards to public utility vehicles, and a public transport modernization program, which aims to provide subsidies to PUVs to convert to more efficient engines and bodies.
Such move is expected to minimize the impact of the increase in PUV fares.
During previous hearings by the Senate ways and means committee, transport groups warned that even with the assistance program of the government, the proposed oil tax hike could result in an increase in the minimum jeepney fare from the current P8 to P10.
“We have to ensure that proper safety nets are in place to exclude the PUVs from the tax hike so fares need not increase,” Angara said.
He added that the House of Representative was able to introduce changes to the original proposal of the Finance department to ensure that most cars, especially low-end models, will remain affordable.
Under the proposed adjustment of excise tax on automobiles, mass-market vehicles such as the base model Toyota Vios would increase by P10,000, Mitsubishi Mirage by P13,000 and Toyota Innova by P43,000, while SUVs such as Toyota Land Cruiser will increase by as much as P950,000.
In order to free up road space, Angara said, the committee is looking at imposing higher taxes on the third and fourth vehicles owned by taxpayers through the motor vehicle user’s charge or MVUC.