The Motor Vehicle User's Charge: Some Issues and Recommendations

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Road funds coming from the Motor Vehicle User's Charge (MVUC) are funds reserved for specific programs or projects. The MVUC is collected by the Land Transportation Office (LTO) from motor vehicle owners. It is imposed through the registration fees of vehicles and payment of penalties for overloading. The collections are remitted to the Bureau of Treasury (BTr) under four special types of fund. Key findings from this study indicate the mismatch between the records of the LTO and the BTr on the MVUC monies. Moreso, two special funds—the Special Local Road Fund and the Special Vehicle Pollution Control Fund—are seriously underutilized. This Policy Note recommends to make the recording of MVUC deposits transparent and efficient through automation, regular reconciliation of LTO and BTr records, and random audits. Establishing an impact evaluation system for all projects funded by the MVUC is also suggested.