No price hike in basic goods despite VAT on toll — Palace

Even with the implementation of the value added tax (VAT) on toll starting today, Malacañang downplayed claims that this would jack up prices of basic commodities and may even warrant a fare increase in public utility vehicles plying along tollways.

At a press briefing yesterday, presidential spokesman Edwin Lacierda said there’s nothing to worry about even if toll rates would now be higher by 12 percent as a result of the VAT on toll because “the effects on transport fare and goods of the tax measure would be minimal.”

“The effect on goods, or the effect on passenger buses and the effect on passengers will be very insignificant,” Lacierda said as he noted that “any incremental increase in fares would be shared by passengers and the effect would be minimal.”

But while allaying fears that the effect of the VAT on toll would be hardly felt by the public, Lacierda raised the possibility that some traders might take advantage of the situation and jack up their prices.

“If somebody is going to increase the cost of goods higher than 12 percent, that is something that we will seriously look into. That is not, and should not be the effect of this increase on VAT,” he said.

Besides, Lacierda added, the VAT on toll would be given back to the public because the revenues raised would be used to fund other government projects.

There has been a stiff public resistance over the VAT on toll but the Aquino government has stood pat on its decision to implement it, claiming it had no choice but to respect the ruling of the Supreme Court (SC) and impose 12 percent VAT charges on toll although the high tribunal made a position that despite its decision, the government actually has the option on whether to implement it or not, especially in the light of the growing clamor from senators for the government to defer its implementation.

The SC unanimously voted to impose VAT on tollway charges on July 19 following more than a year-long legal tussle on whether or not toll rates should be covered by the VAT law which was originally designed to raise revenues by imposing additional taxes on non-essential and luxury goods and commodities.

In its decision, the high tribunal maintained that the Bureau of Internal Revenue (BIR) did not usurp legislative power or expand the coverage of the VAT law when it sought to impose the VAT on toll rates.

According to the BIR, every passenger will have to pay an additional 1.6 centavos for every kilometer on toll roads as a result of the VAT on toll. –Virgilio J. Bugaoisan, Daily Tribune