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TRB set to decide on toll hike

/ 08:46 PM September 05, 2011

MANILA, Philippines—The Toll Regulatory Board (TRB) is set to meet this week on whether to approve a 12-percent toll hike in time for the Bureau of Internal Revenue’s (BIR) implementation of value-added tax (VAT) on highway fees by October 1.

TRB spokesman Julius Corpuz said a decision on the rate adjustment would be released later this week or early next week, amid protests of transportation and concerned citizen groups.

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“We are trying to get a quorum for the board to meet this week,” he said in an interview.

The agency’s board is made up of five members, namely representatives from the Department of Transportation and Communications (DoTC), Department of Public Works and Highways (DPWH), National Economic Development Authority (NEDA), Department of Finance (DoF) and the private sector.

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“We are on a tight schedule but I think we can implement the VAT on toll by October 1, which is the deadline set by the BIR,” Corpuz said.

Corpuz said the BIR will collect 12 percent of toll operators’ gross revenues, regardless of whether an adjustment in the fees collected from the public is approved. Without an increase in rates, private sector toll operators, which spent for the construction and operation of highways, face massive losses.

In a separate interview, Isaac David, president and CEO of South Luzon Tollways Corp. (SLTC), said the company faces a drop in revenues even if the adjustment in rates are approved on time.

“Whenever there is an increase in fees collected from motorists, traffic volumes on toll roads drop significantly,” he said. David said the VAT on toll would compound the problem toll operators are already facing due to the increase in fuel prices, which prompts more people to leave their cars at home and take public transport instead.

“According to our computations, we will also lose about P1 million a month because we will be rounding off the fees we charge. If we don’t do this, we will have to give change in small denominations, which we don’t want to do because it takes time,” David said.

Former Nueva Ecija Representative Rene Diaz, meanwhile, again asked the government to defer its implementation of the VAT on toll.

“We want to know the BIR’s basis for this new tax on toll revenues,” he said in an interview.

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The BIR said it would implement VAT on toll following a Supreme Court decision that said the measure was legal. The court ruling junked a petition by Diaz himself that said toll on highways was already a form of tax that should not have any additional charges.

Diaz noted that at the time the Expanded Value Added Tax (EVAT) law of 2005 was being drafted, the Department of Finance said toll rates would not be included.

“This VAT on toll is not in the law. It is merely the DoF changing its mind,” Diaz said. He also noted that the BIR and TRB should wait until the high tribunal decides on the case with finality. “What if the government loses on our appeal? Will the BIR refund the money if charged?” Diaz asked.

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TAGS: Philippines, state taxes, Toll, toll hike, VAT
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