MEMBERS of the Congress hit the Bureau of Internal Revenue (BIR) and the Toll Regulatory Board (TRB) from imposing the value-added tax (VAT) on the use of tollways starting Aug 16.
In a Senate committee hearing, Senate President Juan Ponce Enrile, and Senators Ralph Recto and Franklin Drilon criticized BIR commissioner Kim Henares and TRB representatives over the imposition of 12 percent VAT on toll.
Recto compelled Henares to justify the proposed toll increase, raising questions over the legality of the toll VAT.
Recto, co-author of the VAT law and Drilon and Enrile, both experts on tax law insisted that the move is illegal, has no basis in law and cannot be justified.
Enrile argue that VAT also constitutes a user's tax on roads belonging to the government and such is not vatable
Recto said "never did we say that a toll is vatable, a government service should not be vatable, that is our contention."
He added, "this is precisely one of the reasons why they never impose VAT on toll when they pass the expanded VAT law in 2005."
The said law is also being used by the BIR to justify their plan on the toll VAT.
In the meantime, the senators and members from the BIR and TRB remained deadlock on the imposition of the 12 percent VAT on toll. (Sunnex)