SC upholds 12% VAT on toll rates By Benjamin B. Pulta 07/23/2011

SC upholds 12% VAT on toll rates

By Benjamin B. Pulta 07/23/2011

A tax on toll paid by motorists will now proceed after a restraining order handed down by the Supreme Court (SC) last year on the implementation of the 12-percent value-added tax (VAT) on tollway rates was lifted by the tribunal.

The high court turned down for lack of merit a petition filed by former Nueva Ecija Rep. Renato Diaz, who was co-author of the expanded VAT Law, and former Trade Assistant Secretary Aurora Timbol questioning the coverage and imposition of VAT on tollway operations by the Department of Finance through the Bureau of Internal Revenue (BIR).

“To dismiss the petition and resolve the issues later, after the challenged VAT has been imposed, could cause more mischief both to the tax-paying public and the government. A belated declaration of nullity of the BIR action would make any attempt to refund to the motorists what they paid an administrative nightmare with no solution,” the decision read.

The high court held that the BIR is not unlawfully expanding VAT coverage by imposing the tax on tollway operators as Section 108 of the National Internal Revenue Code (NIRC) imposes VAT on “all kinds of services” rendered in the Philippines for a fee, with the term “services” given an all-encompassing meaning by Congress..... MORE

Source:  The Daily Tribune

URL: http://www.tribuneonline.org/headlines/20110723hed5.html