BIR to start collecting VAT on toll Oct. 1

PROTEST VS TOLL HIKE. Passenger buses, jeepneys and trucks hold a motorcade from Makati City to the Calamba City exit of the Southern Luzon Expressway on Thursday to protest the toll increases expected to take effect on Oct. 1. NIÑO JESUS ORBETA

Unperturbed by strong opposition from various sectors, the Bureau of Internal Revenue (BIR) on Thursday said it will be imposing the 12-percent value-added tax (VAT) on toll starting Oct. 1.

“We are just implementing the law,” BIR commissioner Kim Henares said in a news briefing at the Department of Justice.

Henares also allayed fears of some groups that the collection of VAT on toll would result in fare increases and hike in the prices of basic commodities.

According to the revenue chief, the effect of the new tax would be minimal as to cause significant increases in the cost of travel for passengers of public utility vehicles such as buses and jeepneys.

“The effect (of VAT on toll) on the prices of fare and transported goods is not that much contrary to what everyone is thinking. I don’t think the figure supports the claims that the VAT collection would lead to price increases,” Henares said.

“If they say that the VAT collection would lead to fare increases, they (public transport companies) are just taking advantage of this,” she added.

By her own computation, Henares said a passenger bus plying the 50-kilometer Magallanes-Calamba route of the South Luzon Expressway would only have to pay an additional .83 centavos for every kilometer, or about P41.50.

If a bus company decides to pass the toll increase onto the passengers, she said the fare adjustment would not be significant.

In fact, Henares said public transport companies need not impose fare increase since the development of toll roads had significantly reduced the travel time from the provinces to Metro Manila.

For example, she said buses which used to have two trips daily from Sta. Rosa City, Laguna to Metro Manila were now able to ply the route five times during a 10-hour period.

“That means the profits of bus companies have significantly increased also,” she said, adding in jest:

“That’s why I’m wondering why these bus companies’ payment of income taxes have remained the same.”

As to whether the VAT collection should be passed onto the motorists, Henares said the Toll Regulatory Board was the appropriate government agency to address the issue.

Toll operators earlier announced that the toll increase would be inevitable after the Supreme Court lifted on July 22 the temporary restraining order it issued last year which prevented the BIR from collecting VAT on toll.