New suit filed vs toll VAT

Citing constitutional prohibitions against double-taxation, consumer groups have filed another petition before the Supreme Court to stop the collection of value-added taxes (VAT) on highway toll.

Although the high court already declared the measure Constitutional less than two months ago, the Taxpayers’ Unity vs Toll Fee Hike in the South Luzon Expressway (Tutol SLEX) on Friday said it was seeking a new temporary restraining order (TRO) against VAT on toll on new grounds.

Tutol SLEX argued that imposing VAT on highway toll was an additional fee for the use of a public service, and therefore “double-taxation.” The group also cited provisions of the 1987 Constitution on equitable and progressive taxation.

“Our petition is on solid grounds. It is plain to see that the VAT on tolls is a form of regressive taxation, which will severely hurt those who are less affluent,” said Tutol SLEX spokesperson Sammy Malunes.

Elvira Medina, president of the National Council for Commuter Protection (NCCP), also signed the petition as coauthor.

The new petition supports a previous motion for reconsideration filed last July by former Nueva Ecija Rep. Rene Diaz, who lost the case, paving the way for the VAT implementation.

The petition cites Article VI, Section 28 of the Constitution which says that “The rule of taxation shall be uniform and equitable. The Congress shall evolve a progressive system of taxation.”

“Imposing the VAT on toll runs counter to the spirit of the 1987 Constitution. The Supreme Court, we believe, should stand on the side of the Constitution and the general public on this issue,” Malunes said.

Since VAT on toll was implemented at the start of the month, Tutol SLEX and the NCCP have launched several protest actions against the measure, including motorcades on the privately-run expressways.

The groups promised more protest actions.

“It goes without saying that our petition before the Supreme Court is only an addition to, and will not replace, the various forms of protests that we are launching against the VAT on toll. We should in fact intensify our protests against the tax measure,” Malunes said.

The government stands to earn an additional P2 billion from the imposition of VAT on toll. The measure was initiated by Bureau of Internal Revenue Commissioner Kim Henares last year, but the implementation was delayed due to a SC restraining order.

Last August, the SC lifted its TRO, and ruled that the use of expressways maintained and operated by private firms was considered a service that is sold to the public and hence, should be subject to VAT.  With a report from Jerome Aning