Council Endorses Letter of Taxi Operators to BIR Commissioner

THE City Council has officially endorsed to the office of the Commissioner of the Bureau of Internal Revenue (BIR) the letter of the Samahan ng Taksi sa Cordillera Administrative Region (STCAR) seeking for the deferment of the implementation of a three percent (3%) tax based on metered gross receipts also known as Common Carrier Tax (CCT) in the City of Baguio and in the Cordillera Administrative Region (CAR).

The official endorsement embodied in a resolution passed by the City Council last Monday gives added assurance to the taxicab operators in the City that their letter to BIR Commissioner Kim Henares will be considered and acted upon.

The implementation of the said 3% tax on metered gross receipts is contained in, and pursuant to Revenue Memorandum Order No. 12-2012 requiring the registration of all taxi meters issuing receipts and the payment of the said tax on gross receipts.

In seeking deferment of its implementation the concerned taxicab operators in the City of Baguio and CAR cited several reasons that would justify the delay such as that while the law, Republic Act 9337, mandates the government and its implementing agency the BIR to collect the necessary CCT from the taxi transport sector, they also have an equal obligation to sustain the survivability of the taxi industry. Another reason posited by the taxi operators is the fact that despite the enactment early on of the said law it was not apparently immediately implemented by the BIR and instead adopted several revenue regulations adjusting the minimum monthly gross receipts in computing the CCT to be paid by the taxi operators. The latter also argued that part of the gross receipts flow to the taxi drivers since it is only the so called “boundary” which is paid to the taxi operator. The question next raised by the said taxi operators in their letter to Commissioner Henares is that should the taxi drivers, having received a portion of the gross receipts, also liable to absorb part of the CCT burden?

The taxi operators associated with STCAR also questioned the reasonableness of the said three percent tax citing that a majority of them are single or double unit operators only. In other words they will ostensibly bear the brunt of the said law considering that they are operating below break-even due to continuous hikes in the cost of transport operation which has not allegedly been fully regulated by the government. They further lamented that should the law be implemented now, with the cost of operating a taxi service increasing and the prices of fuel, spare parts, professional services and prices of motor vehicles continuously spiraling upwards, and without any commensurate increase in fare rates, it will surely destroy the taxi industry.

Finally, the imposition of the said three percent CCT to the City’s and CAR’s local taxi operators while the same has allegedly not yet been enforced in Metro Manila and in other major Cities in the country will be in violation of their right as guaranteed under the equal protection clause of the 1987 constitution.

The City Council in passing the resolution of endorsement relied partly on the recommendation of the Committee on Public Utilities, Transportation and Traffic Legislation and partly on the explanations provided by representatives of STCAR who appeared before the City Council last Monday to plead their cause in front of the members of the august body.