MANILA, Philippines - The Bureau of Internal Revenue (BIR), the government’s main revenue agency, hopes to collect some P6.5 billion worth of back taxes from toll operators following the Supreme Court’s decision which said that value added tax (VAT) on toll is allowed by law.
The BIR is now laying the groundwork for the implementation of the VAT on toll, its top official said during the weekend.
BIR Commissioner Kim Henares told The STAR that she would be meeting with representatives of the Toll Regulatory Board (TRB) and toll operators for the implementation of the law which has long been delayed.
“The earliest would be August. We still have to meet with the TRB and the operators,” Henares said.
She said there was also a need to discuss the collection of back taxes, estimated at roughly P6 billion. She said there is no stopping the BIR from implementing the tax following the decision of the Supreme Court.
In a decision promulgated on July 19 but made only last week, the high court ruled that the imposition of VAT on toll may be implemented by the government.
The agency expects to generate roughly P2 to P2 billion annually in additional revenue from the VAT on toll.
The BIR has been arguing that the VAT on toll is not a new tax and should be slapped in accordance with the VAT law. Under the amendments to the VAT law in 2005, franchise receipts of franchise holders such as toll operators are subject to VAT.
The law should have been implemented as early as 2005 but has been deferred because of administrative setbacks and stiff opposition from toll operators.
The BIR, Henares said, under her leadership would strictly implement all tax laws as part of efforts to boost state coffers.
As of the last count, BIR estimates that toll operators owe the government a total of P6.5 billion in unpaid VAT on toll from 2007 to 2009.
The agency, under the administration of then BIR Commissioner Joel Tan-Torres planned to implement the controversial VAT on toll in April last year but deferred the move after the Toll Regulatory Board and tollway operators sought more time to prepare for the measure.
The BIR, the government’s main revenue agency has been assigned a tax collection target of P940 billion this year, or higher than last year’s target of P860 billion.
Next year, the agency is tasked to collect P1.06 trillion, the first time its revenue goal will hit the P1-trillion mark.