VAT on toll to be collected by October

Toll on all privately-run expressways are to rise by 12 percent on October 1 with the slapping of value-added tax (VAT) on their operations, according to a government announcement on Thursday.

The move, which has been fiercely opposed by motorist and transport groups who expected the tax to be totally passed on to toll users, is expected to give the government an additional P2 billion a year in revenues to help keep state finances healthy.

“The BIR (Bureau of Internal Revenue) in a meeting with toll road operators and the Toll Regulatory Board (TRB) agreed to impose VAT on toll on October 1,” the TRB said in a text message to reporters late Thursday.

The implementation of the VAT was held back a month later than the original target of September 1, TRB Spokesperson Julius Corpuz said.

“This is to give the toll operators ample time to prepare for a smooth implementation (of higher fees),” he said.

Notices would be published in newspapers once the new rates for each highway were finalized, he added.

The Department of Finance ordered the imposition of VAT on toll last year as it struggled to find new sources of income.

The Supreme Court earlier issued an order temporarily restraining the imposition of VAT on tolls, but in a decision last month, sided with the government on the issue.