BIR to continue bid to impose VAT on toll

MANILA, Philippines - The Bureau of Internal Revenue (BIR), the government’s main tax agency, will continue to push for the imposition of value-added tax (VAT) on toll following the Supreme Court’s move to lift its temporary restraining order (TRO) on the implementation of toll increases.

“We will wait for their decision on the VAT,” BIR Commissioner Kim Henares told The STAR.

The battle isn’t over yet, she said, adding that she remains hopeful the agency would be still be able to collect VAT on toll amid the government’s pressing need to raise revenues.

“That will help a lot,” she noted.

Last week, the Supreme Court declared as valid and constitutional the resolutions issued by the Toll Regulatory Board (TRN) allowing for the rate increases at the South Luzon Expressway (SLEX) but deferred action on the TRO on VAT.

The lifting on the TRO on the rate increases paves the way for the implementation of increased toll rates by the South Luzon Tollways Corp., the operator or the expressway, as soon as this week, SLEX spokesperson Alma Tuazon said during the weekend.

SLTC had wanted to implement the toll hikes as early as last June 30, the last day of the Macapagal-Arroyo administration but motorists and transport groups sought for a TRO from the Supreme Court on the implementation of the toll increases.

Henares said while the High Court did not lift the VAT on toll, it does not mean the fight is over because there’s a separate pending case on it.

“So we will just wait for the decision,” Henares said.

The BIR has been arguing that the VAT on toll is not a new tax and should be slapped in accordance with the VAT law. Under the amendments to the VAT law in 2005, franchise receipts of franchise holders such as toll operators are subject to VAT.

She said the law should have been implemented as early as 2005 but has been deferred because of administrative setbacks and stiff opposition from toll operators.

Henares said that under her leadership the BIR would strictly implement all tax laws as part of efforts to boost state coffers.

As of the last count, BIR estimates that toll operators owe the government a total of P6.5 billion in unpaid VAT on toll from 2007 to 2009.

The agency, under the administration of then BIR Commissioner Joel Tan-Torres had planned to implement the controversial VAT on toll last April 1 but deferred this after the Toll Regulatory Board and tollway operators sought for more time to prepare for the measure.

The measure is estimated to translate to additional revenues of P1.3 billion if fully implemented, according to computations made by the BIR.

The VAT on toll was supposed to be implemented as early as 2005 but the Macapagal-Arroyo administration decided to shelve its implementation amid pressure from motorists and transport groups.