Business Cost News

House panel OKs toll VAT exemption

MANILA, Philippines – The House committee on ways and means voted yesterday to endorse at least four bills seeking to exempt expressway toll from the 12-percent value added tax (VAT).

The vote came four days after the Bureau of Internal Revenue (BIR) started collecting VAT on fees for the use of expressways, including the North Luzon Expressway, South Luzon Expressway, Subic-Clark-Tarlac Expressway, Southern Tagalog Arterial Toll Road in Batangas, and the Skyway in Makati to Alabang in Muntinlupa. Hundreds of thousands of vehicles pass through these toll roads every day.

The BIR has vowed to continue collecting the tax until Congress approves and Malacañang enacts a bill exempting tolls from VAT.

Malacañang has not stopped the BIR, saying the Supreme Court has allowed the collection of toll VAT.

Members of the ways and means committee said they would try to convince House leaders to have the consolidated bill on toll VAT exemption approved on third and final reading before the start of the congressional recess next weekend.

It not clear if there is a counterpart measure in the Senate, though several senators have signed a resolution opposing the collection of VAT on toll.

In their bills, congressmen said the VAT law is unclear on whether expressways are covered by the tax.

They said their proposals aim to clarify the intent of Congress to exclude these highways from the coverage of VAT.

They said the BIR should not interpret the law by expanding its coverage to areas that are not expressly included in the application of the levy.

The lawmakers pointed out that toll fees are already a tax for the use of expressways.

To impose the 12-percent VAT on such fees is like levying a tax on tax, which is against the Constitution, they stressed.
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By: Jess Diaz
Source: The Philippine Star, Oct. 5, 2011
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