MANILA, Philippines - The Bureau of Internal Revenue (BIR) has issued a circular mandating tollway operators to impose a 12% value-added tax on toll fees for private vehicles starting April 1, 2010.
Revenue Memorandum Circular 30-2010 states "it is hereby clarified that such imposition of the VAT shalll be initially applicable to toll fee collected from private motor vehicles by the tollway operators effective Thursday, April 1, 2010."
BIR Commissioner Joel Tan-Torres said the agency has long notified the Toll Regulatory Board (TRB) of its intention to impose the VAT, which is expected to generate as much as P1.3 billion in additional revenues annually.
"It's high time this be done. Everyone's paying water, electricity, why should not a Benz pay the VAT?" He said.
Tan-Torres said only private vehicles will be charged the VAT since the BIR was still studying how the tax would affect public vehicles.
Meantime, TRB Spokesperson Julius Corpuz was surprised to hear about the order, saying none of the toll operators have been given notice that the tax was to be implemented already.
Corpuz emphasized that to the TRB's knowledge, the implementation had been deferred, pending the resolution of some factors, including the fact that tollways do not distinguish between public and private vehicles. Currently, vehicles are only classified by size and type.
He added that should the order be implemented, the increase would have to be more than 12%, as the toll fees would have to be recomputed and rounded off to exact amounts -- a measure done to avoid scenarios where loose change slows down the transactions.
"The legal issue has to be resolved, as to whether VAT can indeed be imposed. That matter was discussed earlier and as far as we know there's no finality on the matter," he said.
Corpuz noted the TRB would raise the issue with the BIR on the next Cabinet meeting on March 30, and ask that the public be given 30-day notice if the order was already final.
"April 1 is Holy Thursday. Many are traveling to the provinces. This would cause a commotion," he said.
