MALACANANG will honor its contractual obligations under the toll hike agreement in South Luzon Expressway (SLEX) and will abide on court decision on the legality of imposing value-added tax (VAT) on toll fees.
Presidential Communications Development and Strategic Planning Secretary Ricky Carandang said the government is fully aware of its responsibilities under the Supplemental Toll Operation Agreement (STOA) inked between the Toll Regulatory Board (TRB) and the South Luzon Tollways Corp. (SLTC).
The deal holds the 25-year concession agreement on the SLEX.
He said the government is bound to honor its contractual obligations so as not to send wrong signal to foreign investors.
He said enticing more investments is part of President Aquino’s agenda during his forthcoming one-week trip to the U.S. beginning September 30 this year.
“It is very important to send a message to the international community, to potential investors, that the Philippines honors its contractual obligations. That is a message that we are going to send when we go to the United States,” he added.
The President has suspended the imposition of VAT on toll fees pending further discussions on the issue.
Carandang said the President is fully aware and concerned on the burden of a toll increase on motorists.
He said Finance Secretary Cesar Purisma and Bureau of Internal Revenue Commissioner Kim Henares are now working on some proposals to mitigate the potential increase in toll rates.
“The President mentioned already that he had set aside the VAT on toll. At any rate, it is in the hands of the court. But if the courts would say that we cannot do that, obviously we will comply with the court’s ruling,” Carandang added.
The SLTC was set to implement a 250 percent increase in toll rates, but the Supreme Court issued a temporary restraining order last Friday, stopping the supposed toll hike imposition as well as the BIR’s plan to impose the VAT on toll rates. (JMR/Sunnex)