Thursday, May 15, 2008

Trouble with the MVUC

If you are a vehicle owner, then MVUC should be your concern.
MVUC stands for Motor Vehicle User’s Charge.
It is a monetary ‘charge’ by the government upon vehicle owners.
It is a regularly collected on an annual basis.
As a vehicle owner, you will find this motor vehicle user’s charge in the LTO official receipt or the “O.R.” as it is commonly called.
The basic question we are asking on this issue of the M.V.U.C. is: Where does this M.V.U.C. that vehicle owners pay every year to the government go?
First: Why there is there a charge on vehicle use?
The government wants to ensure the adequate maintenance of the country’s roads.
To provide funding for this purpose, the government enacted this revenue measure in 2001, Republic Act No. 8794 entitled “An act imposing a motor vehicle user’s charge on owners of all types of motor vehicles”
The rationale is that since vehicle owners are primarily the ones who use the roads in our country, then they must help provide funding to maintain these roads.
Second How much is the MVUC collection of the government?
The M.V.U.C. is the third largest source of revenue for the government, next only to the Bureau of Internal Revenue (BIR) and Bureau of Customs (BoC).
Since the enactment of RA 8794 in 2001, the government has collected P42-billion, based on the L.T.O. Report on M.V.U.C. collections for 2007
Yearly, the government collects more than P7-billion from the M.V.U.C.
Where do these collections go?R.A. 8794 mandates that collections from M.V.U.C. must be placed in four special trust accounts.
Eighty percent (80%) of the annual collections are deposited in a special account called Special Support Fund.
Five percent (5%) of the annual collections are deposited in another special account called Special Local Road Fund
Seven and one half percent (7.5%) of the annual collections are deposited in another special account called Special Road Safety Fund
Seven and one half percent (7.5%) of the annual collections are deposited in another special account called Special Vehicle Pollution Control Fund.
Two departments control the M.V.U.C. Funds. These are the Department of Public Highways (DPWH) and the Department of Transportation and Communications (DOTC)
The bulk of the M.V.U.C. collections is controlled by the DPWH consisting of 92.5% of the collections.
The trust accounts in the Special Support Fund (80%), Special Local Road Fund (5%) and Special Road Safety Fund is under the DPWH (7.5%).
The mandate of the M.V.U.C.
The M.V.U.C. collections of P7.7-billion a year is in addition to the annual budget of the DPWH for road maintenance.
Thus, in the national budget, there is already a specific appropriation for road maintenance.
The M.V.U.C. is supposed to be on top of the appropriations for road maintenance by the DPWH.
The M.V.U.C. cannot be found in the general appropriations act.
Unfortunately, you cannot find any provision of the M.V.U.C. collections and its appropriations in the general appropriation act.
This despite a specific constitutional mandate that no money shall be paid out of the Treasury except in pursuance of an appropriation made by law.
Since the enactment of the R.A. 8794, the M.V.U.C. only appeared in the GAA once, in 2003.
The question now is, how will the people, the vehicle owners, through their representatives Congress be able to know how the money is spent if this is not found in the GAA?
How can our legislators scrutinize the M.V.U.C. expenditures during budget deliberations, when it is not submitted by the executive department in their proposed general appropriations bill?
The Executive Department Report: Only P4.6-billion of M.V.U.C. collections left
What is very alarming is the report by the Executive Department that as of December 31 2006, only P4.6.-billion of the M.V.U.C. collections are left
Based on figures from the Budget of Expenditures and Sources of Financing (B.E.S.F.), as of December 31, 2006, the total collections of M.V.U.C. should have already amounted to P34.4 billion pesos.
If, as of December 31, 2006, only P4.6-billion of M.V.U.C. collections are left, where did the money go?
How was it spent?
There is no breakdown of the expenditures of these funds
Congress doesn’t know because it was never submitted to it (except in 2003) for scrutiny during budget deliberations.
Gargantuan budget for road maintenance in DPWH
The DPWH receives a gargantuan budget for road maintenance every year.
Under the GAA of 2007, the DPWH received a total lump-sum appropriation of P6-billion for road maintenance.
To compare, the entire budget of the Department of Tourism for 2007 was only P1.5-billion; Department of Energy was only P350-million; DBM budget was only P699-million
Lump sum appropriations in itself are constitutionally questionable.
However in the 2007 GAA (national budget) P2-billion (lump sum) was appropriated for “routine maintenance of national roads & bridges (See Item A.III.a.1.d. 2007 GAA or page 657 of the Official Gazette March 16, 2008).
There was no breakdown as to how these lump-sum appropriation was to be spent.
Another P4-billion (lump sum) was appropriated for “preventive maintenance of national roads and bridges” (See A.III.a.1.e of 2007 GAA or page 657 of the Official Gazette March 16, 2008 )
There was no breakdown as to how these lump-sum appropriation was to be spent.
The P6-billion budget in the DPWH for road maintenance does not yet include the P7.7-billion annual collections from the M.V.U.C.
If this is added, then the total budget for road maintenance supposedly should amount to more than P13-billion YEARLY.
The question is: Why are the country’s roads still in a state of perpetual deterioration?
If P13-billion is spent YEARLY for road maintenance, then the country should already have the best roads.
The COA findings provide answers
The findings of the Commission on Audit give a clue as to how the M.V.U.C. collections were mis-spent.
In the 2005 COA Report, it was found out that the M.V.U.C. funds were spent for expenses not related to road maintenance such as:
Employee benefits (P145-million)
CNA Incentive Bonus (1.9 billion )
Employee benefits were mis-recorded as “repairs and maintenance-Roads”
Prior years expenses were also erroneously recorded as current expenditures in 2004, thus overstating the account by over P161-million (source: Item No. 7 2004 COA report)
The C.O.A. also found out that expenses totaling P57-million were spent which was not related to road maintenance and anti-pollution programs (source: Item No. 12 2005 COA Report)
Thus with this presentation, what we can see clearly is an urgent need for people involvement in monitoring how taxpayer’s money are spent.
We see that the people are groping in the dark as to where the money they give to the government goes.
There is clearly a need for greater transparency in the budget process.
We must question the expenditures of every single centavo that we pay the government.
We must participate.

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