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BIR gives up on tollway firms’ back taxes

Seeks assurance on VAT collection starting Oct. 1
/ 10:13 PM September 12, 2011

BIR: Intent on toll VAT starting October 1.

The Bureau of Internal Revenue is requiring tollway operators to sign up and ensure that they will implement the collection of the value-added tax on toll starting October 1.

The BIR, through Revenue Memorandum Circular No. 39-2011, has also exhorted tollway firms that have been assessed with VAT liabilities on toll collection before its official implementation to apply for an “abatement” or reduction of their dues.

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RMC 39-2011 formalizes BIR Commissioner Kim Henares’ earlier pronouncements that the BIR was no longer interested in pursuing the collection of back taxes on expressway fees.

Henares had said that based on earlier BIR rulings, the VAT on toll should have been implemented since 2009 and the agency should have collected some P6.5 billion.

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However, the memorandum signed last August 31 required the tollway firms to go through clerical motions.

“Tollway operators that have been assessed VAT liabilities on receipts from toll fees for prior periods can apply for abatement of the tax liability, surcharge, interest and penalties under Section 204 of the National Internal Revenue Code and Revenue Regulation No. 13-2001,” the memorandum stated.

RMC 39-2011 also stated that the companies “are required to enter into, sign and submit a memorandum of undertaking on or before Oct. 1, 2011, regarding the implementation” of the VAT on toll.

During talks with the BIR and the Tollway Regulatory Board, operators who initially resisted the VAT on toll argued for the BIR to reduce the amount of back taxes the agency wanted to collect from the companies.

During the Arroyo administration, the BIR sent tollway operators notices assessing the operators a total of P6.5 billion in unpaid VAT for the 2007-2009 period.

Last year, then BIR chief Joel L. Tan-Torres expressed disappointment and impatience about the continued impasse considering the BIR issued an order last December telling the operators to start VAT collection on April 1, 2010.

The order was deferred after talks through a technical working group—where the BIR, the operators and the TRB were represented—dragged on.

Operators have told the revenue chief of their readiness to pay the back taxes, although they maintained that they should not be liable as they were still awaiting the TRB’s green light to change toll rates.

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TAGS: Bureau of Internal Revenue, state taxes, Toll, value-added tax
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