Operators to implement VAT on tollways when court ruling becomes final

MANILA—Operators of the country’s major toll highways said they would be left with no choice but to pass on the additional tax on toll fee to motorists.

Metro Pacific Tollways Corp. (MPTC), operator of two of the country’s longest toll roads, said it would implement a fare hike once the Supreme Court’s decision becomes executory and a ruling is made with finality.

“Well, we just have to comply,” MPTC president Ramoncito Fernandez said in an interview on Friday. He noted that the company had yet to get a copy of the court ruling. He said he also expected the decision to be appealed.

MPTC, controlled by the group of Manuel V. Pangilinan, currently operates the North Luzon Expressway (NLEx) and the Subic-Clark-Tarlac Expressway (SCTEx).

The operator of the South Luzon Expressway (SLEx), the major toll road south of Manila, said it too would implement a toll hike once ordered to do so by the Bureau of Internal Revenue.

“As soon as the TRB (Toll Regulatory Board) gives us the go signal, we will start collecting the additional 12 percent from motorists,” said Isaac David, president of South Luzon Tollways Corp. (SLTC).

David said the company would also seek guidance on how to implement the toll hike for fees that need to be rounded off to the nearest peso amount. SLTC’s policy is to round off fees to make it easier and faster to give change to paying motorists.

“The problem is that if we round it off to the nearest peso (in some cases), we can end up collecting more than 12 percent,” he said.

SLTC is the local unit of Malaysian conglomerate  MTD Capital Berhad.

Operators of the Metro Manila Skyway and the Southern Tagalog Arterial Road (Star) toll road, the two other roads in the country, could not be reached immediately for comment.

Meanwhile, the TRB declined to issue a comment, saying that the agency had not received a copy of decision of the high court affirming the legality of the VAT on toll fees.

The move to impose value-added taxes  on toll fees was ordered by the BIR last year, but the move was stopped by the Supreme Court before it could be implemented.

The Aquino administration has pushed for its implementation to increase the government’s sources of revenue and lower the state’s bloated deficit.

Toll road operators and the TRB argued at the time that fees from motorists were already a form of tax.

Several lawmakers also opposed the VAT on tax, including Senate President Juan Ponce Enrile and former socio-economic planning secretary Ralph G. Recto.