Press Release
March 31, 2010


Senate President Juan Ponce Enrile stated today his opposition to the Bureau of Internal Revenue's (BIR) intention to impose Value Added Tax (VAT) on toll fees starting Thursday, April 1, 2010. The VAT on toll fees would first be imposed on private vehicles, according to the BIR.

Enrile stated that toll fees are in the nature of taxes. "As early as August of last year, I have already stated that I am not in favor of any additional taxes, as our people are already over-burdened with their financial obligations. In the case of owners of private vehicles, they already pay their dues to the government under the Road Users Tax to recover the fees expended by the government for the construction and maintenance of these roads. If we impose additional VAT on toll fees, it will impose additional burden on the vehicle-owners," Enrile explained.

"If VAT will be imposed on vehicles traversing national roads nationwide, then it will even increase the cost of government because even government-owned vehicles will have to pay the additional VAT eventually," Enrile added.

Enrile also shares the same position as that of the Toll Regulatory Board (TRB) saying that this will impair obligations of the government under the Build-Operate-and-Transfer contract between toll operators and the government. According to the TRB, VAT on toll is not part of the toll operation agreements between the two parties.

The BIR issued on March 26, 2010 Revenue Memorandum Circular (RMC) 30-2010 which reiterated the collection of the 12 percent VAT on toll way operators as previously mandated under RMC 52-2005 and RMC 72-2009, citing Section 108 of the National Internal Revenue Code of 1997, as amended, on VAT-able sale of services as legal basis.

Enrile further added the government must go slow in implementing such plan as this has other serious implications such as the increase in transportation cost and fares to be paid for by commuters. Moreover, it will also increase the cost of food production and the transport of food from the provinces to urban areas, and vice versa.

"It seems that the BIR did not study this plan well. Ultimately, it will be our consumers and the poor people of this country who will suffer and be made to shoulder the cost of this 12% VAT on toll fees," Enrile lamented.

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