AN ACT IMPOSING A MOTOR VEHICLE USER''S CHARGE ON OWNERS OF ALL TYPES OF MOTOR VEHICLES AND FOR OTHER PURPOSES

Case Overview and Summary

Summary of Republic Act No. 8794

Declaration of Policy
• The policy is to provide for and ensure adequate maintenance of national and provincial roads through sufficient funding. (Section 1)

Coverage
• Imposes a Motor Vehicle User's Charge (MVUC) on every motor vehicle, whether for hire or private use, including government motor vehicles, in lieu of the registration fee under Republic Act No. 4136 and the Private Motor Vehicle Tax under Executive Order No. 43. (Section 2)

Rates of the Motor Vehicle User's Charge
• For private passenger cars registered before the law's effectivity, the MVUC is the Private Motor Vehicle Tax under EO 43 plus 25% for the first year, 50% for the second year, 75% for the third year, and 100% for the fourth year and thereafter. (Section 3a)
• For new private passenger cars registered after the law's effectivity, and for other motor vehicles, the MVUC rates are based on the vehicle type, gross vehicle weight (GVW), and whether it is for hire or private use. The rates increase by 25% in the first year, 50% in the second year, 75% in the third year, and 100% in the fourth year and thereafter. (Section 3b)
• The President may adjust the rates based on the Consumer Price Index, but not more than once every five years. (Section 3)
• Sports utility vehicles pay 15% higher than private utility vehicles. (Section 3b)
• Motorcycles for hire with sidecars shall not pay more than ₱300. (Section 3b)

Government Motor Vehicles
• The manner of payment for government motor vehicles shall be in accordance with procedures promulgated by the Department of Budget and Management. (Section 4)

Reclassification and New Models
• The Land Transportation Office (LTO) shall recommend changes to the motor vehicle classifications to the Department of Transportation and Communications (DOTC). (Section 5)
• Manufacturers and assemblers must submit specifications of new models to the LTO at least 3 months before introduction, and the LTO shall release the MVUC classification before the model's release. (Section 5)

Penalty for Overloading
• An amount equivalent to 25% of the MVUC shall be imposed on trucks and trailers for loading beyond their prescribed gross vehicle weight, with a maximum axle load of 13,500 kg. (Section 6)

Disposition of Monies Collected
• Monies collected shall be earmarked solely for road maintenance, drainage improvement, traffic lights and road safety devices, and air pollution control. (Section 7)
• The collections shall be deposited in four special trust accounts: Special Road Support Fund (80%), Special Local Road Fund (5%), Special Road Safety Fund (7.5%), and Special Vehicle Pollution Control Fund (7.5%). (Section 7)
• The funds shall be managed by a Road Board composed of the Secretaries of DPWH, Finance, Budget and Management, and DOTC, and three members from transport and motorist organizations. (Section 7)

Status of the Special Funds
• The special funds are separate from and in addition to the annual appropriations for the DPWH and DOTC. (Section 8)
• Any savings from the special funds shall accrue to their respective funds. (Section 8)

Implementing Rules and Regulations
• The Secretaries of DPWH and DOTC shall jointly promulgate the implementing rules and regulations within 30 days from the law's effectivity. (Section 9)

Prohibition Against Similar Charges
• No other tax, fee, or charge similar to the MVUC shall be imposed by any political subdivision or unit in the country, including on tricycles, motorized pedicabs, and "trisikads". (Section 10)

Repealing Clause
• Repeals or modifies provisions inconsistent with this Act, including Executive Order No. 43 and Section 8 of Republic Act No. 4136. (Section 11)

Separability Clause
• If any provision is declared unconstitutional or invalid, the other provisions shall remain in full force and effect. (Section 12)

Effectivity
• The Act shall take effect 15 days after its publication in at least two newspapers of general circulation. (Section 13)