LTO to implement Road User’s Tax next month

The Land Transportation Office (LTO) will implement next month the controversial Republic Act 8794 or the Road User’s Tax that increase motor vehicle registration fees by 25 percent this year.

A source at the Department of Transportation and Communications (DOTC) said the law, also known as the motor vehicle user’s tax, was supposed to be enforced this month but its implementing guidelines have yet to be signed by DOTC Secretary Vicente Rivera Jr.

"The Implementing Rules and Regulations have already been formulated, but we’re waiting for the guidelines that will be used in the registration. After it has been signed and published, we can implement it," the source said.

Upon its approval last year, the tax scheme raised criticisms from various transport groups, which complained that the measure would only be an additional burden for public transport operators and drivers.

The groups also argued that the government should not turn to them to generate much-needed revenues because they are already faced with rising costs of fuel and vehicle spare parts.

They threatened to spearhead a transport strike, prompting Malacañang to formulate its gradual implementation to cushion its impact on the public.

Initially, vehicle registration fees were planned to be raised by at least 500 percent. Malacañang later agreed that there would only be a 100 percent increase and that the increase would be implemented over a four-year period.

The DOTC source maintained that this increase was long overdue. Over the past two decades, registration fees for private vehicles have been adjusted twice, while there had been no increase in public utility vehicles’ fees.

The source said they expect no resistance when the tax scheme is implemented next month.

"Resistance had already been addressed by Malacañang last year so I don’t think there will be a hindrance to its implementation now," the insider added.

The insider said that vehicles with license plates ending in 1 might not be covered by the new tax rate as they are scheduled for registration this month.