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Solon moves to prevent 12% VAT on toll fees


Taking a heavy toll

Some 81 lawmakers today moved to exclude toll on expressways from the coverage of value-added tax (VAT) as the Bureau of Internal Revenue (BIR) prepares to implement a 12 percent VAT increase on toll in both the North and South expressways.

House Bill 5185 principally authored by Rep. Victor Ortega (1st District, La Union) aims to clarify the legislative intent of Congress that toll on expressways are not subject to VAT.

"As provided by our Constitution, all taxes must emanate and be approved by Congress. To expand the scope of taxation purely on interpretation upon review of the law, 17 years since it was passed in 1994, is definitely not acceptable to our people," Ortega said.

Ortega said the Department of Finance (DOF) and BIR should defer any implementation until Congress has settled and clarified this issue.

"To allow a tax burden on the people without a clear imposition of Congress sets a very bad precedent. The power to tax is the power to destroy. It is the essence of democracy that there should be no taxation without representation," Ortega said.

Ortega added that the issue of whether toll fees on expressways are subject to VAT is still pending with the Supreme Court. A petition, G.R. 93007 was filed by former Nueva Ecija Rep. Renato Diaz and lawyer Aurora Timbol before the SC questioning the implementation of VAT on toll fees.

"Toll fees on our expressways are already a user's tax. To impose VAT on toll fees is to impose tax on tax. This is against the Constitution and public interest," Ortega said.

Ortega said based on the Congressional records, the VAT on toll fees was not included in the deliberations of the Expanded VAT Law in 1994.

SOURCE: House of Representatives, Republic of the Philippines

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