MVUC Hike Proposal Under Review by Philippine Government

The Philippine government is carefully considering a proposed increase in the Motor Vehicle Users’ Charge (MVUC), weighing it against President Ferdinand R. Marcos, Jr.’s push to ease the tax burden on the middle class and small businesses. Data from the Department of Finance (DoF) shows that the Promoting Growth, Revenue, and Equity towards Socio-Economic Sustainability (ProGRESS) tax reform package includes a proposal to increase MVUC rates by 109%, adjusted for a cumulative average annual inflation of 2.1%. Under this proposal, the MVUC for light passenger vehicles would rise to P3,344 from P1,600, and for trucks, to P6,170 from P2,952. The adjustment would apply to private, government, and for-hire vehicles, with the DoF estimating average incremental revenues of P22.39 billion annually from 2027 to 2030. However, the proposal has raised concerns that the increase could undermine President Marcos’ pledge in his State of the Nation Address to provide tax relief to the middle class and micro, small, and medium enterprises. Palace Press Officer Clarissa A. Castro told reporters, “For now, this is just a proposal, so it is still being reviewed. Our President does not yet have a final position.” She added that the proposal needs to be studied to balance its effects, noting uncertainty on whether it would be better for the government or for motorists. The DoF has proposed raising or expanding taxes on several goods, including alcohol, sweetened beverages, plastics, e-cigarettes, and automobiles, as well as adjusting the MVUC, to offset revenue losses from proposed income tax relief. The ProGRESS package is projected to generate P518.71 billion in additional revenues from 2027 to 2030, compared to an estimated P326.92 billion in foregone revenues from the proposed tax relief measures. Source: BusinessWorld Nation