The road user’s tax must also be imposed on green vehicles, the Department of Finance (DoF) said.
In a letter to Albay Rep. Joey Salceda dated Sept. 24, 2019, Finance Secretary Carlos Dominguez 3rd expressed his department’s objection on the exemption of green vehicles from the proposed amendments to the Motor Vehicle User’s Charge Act (MVUC) of 2000 under House Bill (HB) 3616.
Under the proposal, all types of motor vehicles whether private, government, or for hire with the exception of green vehicles will be imposed a single-rate road user’s tax.
“[T]he DoF strongly objects the proposed exemption of green vehicles from payment of MVUC under HB 3616,” Dominguez told Salceda.
He defined green vehicles as any vehicles considered to be environmentally friendly and has no damaging impact on the environment; use clean energy sources to fuel its engine, such as but not limited to, electricity, hybrid, solar, wind, hydrogen fuel cell, compressed natural gas, or liquefied petroleum gas, other than the conventional sources of energy like petroleum and gasoline for propulsion.
The Finance chief noted that the imposition of MVUC is a form of regulatory policy, and the principle of which is to take into account the damage inflicted on the road by motor vehicles.
“Green vehicles carry the same externality on roads, therefore users should pay the same charge for road maintenance and repair,” he pointed out.
Dominguez also emphasized that green vehicles are already given preferential excise tax rate under Republic Act 10963 or the “Tax Reform for Acceleration and Inclusion (Train) Law.”
“We believe that the lower excise tax under Train Law is a more appropriate manner to incentivize green vehicles than the proposed exemption from MVUC,” he added.
Despite this, the Cabinet official said the Finance department “fully supports” the rate provision of the proposed measure.
“The Department of Finance fully supports the proposal espoused under HB 3006 as it embodies the DoF proposal on MVUC rate increase,” he added.