TAX AGENDA TERMINATED
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TAX AGENDA TERMINATED

Recto won't adopt Diokno formula

Jan 30, 2024, 2:25 AM
Estong Reyes

Estong Reyes

Writer

THE newly-installed chief economic manager is not keen on taking the lead of his predecessor and just to make sure he won’t be mistaken as such, Finance Secretary Ralph Recto takes the opposite path by assuring the public that the government won’t be imposing new taxes.

In a press briefing, Recto said that he would instead work on lowering taxes if only to ensure a win-win situation where the government collects everything it should while the taxpayers get to comply without getting hurt.


According to Recto, the government will rely on the current imposed taxes to improve the revenues and from there will focus on "what is fairer, easy to collect, and practical."


Enough Taxing Vehicles


Sought for details, the DOF chief cited the increase in Motor Vehicle User Charge (MVUC) or road users’ tax, which he said will discourage motorists from registering their vehicles.


“Frankly speaking, there are no plans of imposing additional new taxes. I think our first job is to collect what is on the table.”


One example, he said, is to temper the increase of Motor Vehicle’s User Charge (MVUC) or road users’ tax, which is a mandatory fee collected from vehicle owners to finance road maintenance and address air pollution.


“We're tempering that proposal (MVUC) because I think that motorists pay a lot of taxes. There are excise taxes and VAT on oil. There are excise taxes, duties, and VAT [value-added tax] on vehicles,” the finance chief said.


The Other Way Around


He also finds it proper to find ways to make the people owning vehicles comply “by providing breathing rooms just to make sure they don’t feel choked.”

“Today, 50 percent or thereabouts of vehicles are unregistered. And if you impose higher taxes, maybe more vehicles will not register, right?” he added.


No less than Land Transportation Office (LTO) chief Vigor Mendoza admitted more than half or 60 percent of the total number of vehicles nationwide are unregistered.

Sought for figures, Mendoza disclosed that only 14 million out of the 38 million vehicles nationwide are registered, and among the possible reasons for the large number of unregistered vehicles, according to Recto, could be the numerous taxes imposed on them.


The agency said the government will lose about P37 to P38 billion this year if the same number of vehicles remain unregistered.


Running After Unregistered


To address the large number of unregistered vehicles, the LTO chief in November last year said that they will implement stricter checkpoints and at the same time disseminate information that there will be stricter checks next year.

Mendoza said he would direct their enforcers to check also on four-wheel vehicles and not only focus on motorcycles.

“Yung checkpoints talagang striktuhan natin yan. .. Alam mo gusto kong higpitan yung kotse eh alam mo kasi I have no doubt na sa tagal ng panahon may mga motorsiklo na hindi na tumatakbo yan. Yes maraming motorsiklo, kasama yan, pero I have asked our regional directors to focus also on four-wheel vehicles,” Mendoza said.

Aside from checkpoints, the agency is planning to bring vehicle registration sites to the barangay or at transport hubs.


Waiving Prescribed Penalties

The agency is also studying to either waive or partially cut the penalties to encourage registration of vehicles. The penalty for late registration is 50% more than the stipulated amount of registration.


For motorcycles, LTO is collecting P2,000 for its registration. However, the amount goes up to P3,000 if the owner comes to the LTO registration office beyond the prescribed deadline of the license plate’s ending number.


If an LTO enforcer spots an unregistered motorcycle, its owner would have to pay P10,000 as a fine or surrender the unregistered bike for impounding.


“We are working on that right now. Sana ma-waive or if not waived, kahit partially waived. Pero ang mas mahal dun, hindi yung penalty. Kasi 50 percent yung penalty… Ang impounding is 10,000 pesos yung ang mas mabigat wag na sana umabot sa bagay na yan,” Mendoza further noted.



Taking Opposite Direction



Interestingly, Recto’s direction runs counter with that of the former Finance Sec. Benjamin Diokno who during his stint aggressively pushed for higher taxes on motor vehicles through the Motor Vehicle Road User’s Tax (MVRUT).


This tax proposal is an amendment to the current MVUC, which charges motorists P120 to P4,000, depending on the motor vehicle’s gross weight.


Under the MVRUT proposal, which was already approved at the lower house,, the new rate will range from P2,080 to P10,400 for passenger cars, depending on the gross vehicle weight.


It also proposes that 45 percent of the incremental revenues from the taxes be allocated to finance the modernization of public utility vehicles.


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