Wednesday, August 11, 2010

BIR Plans To Steamroll Vat on Toll Without Regard For Consequences

BIR plans to immediately steamroll toll tax without regard for consequences.

I came across a news article today saying that Revenue Commissioner Kim Henares of the Bureau of Internal Revenue insists on pushing through with slapping the EVAT on toll fees beginning August 16, 2010. Chair of the Senate Committee on Ways and Means Senator Ralph Recto on the other hand spoke against the planned toll taxation saying that besides deviating from newly elected president Mr. Noynoy Aquino's campaign promise of not imposing new taxes, taxing toll is impractical, so much so that it was not covered by the EVAT Law, hence there has never been a tax on toll up to this point.

Senator Juan Ponce Enrile who is himself an expert in tax law, takes the same stand as Recto, saying that imposing tax on toll, which is different from taxing common carriers on air and sea, has no legal basis. I am glad to see Recto and Enrile call on BIR to make a more thorough evaluation of its plan to tax highway toll rather than steamrolling its haphazard implementation by the beginning of the coming week.
Recall that the operator of the South Luzon Expressway had already announced its plan to hike its non-EVAT toll rates by 250 per cent on the same day the BIR wants to see the toll tax implemented, which means road users will be paying three and a half times what they used to pay for toll, PLUS the proportionate EVAT applied to before the tax rate is applied. This will raise the logistical costs required to transport any and all products that have to traverse the SLEX, which in turn will effect a spike in the net prices that end-consumers will have to bear.

What worries me is how the BIR, clearly “under new management,” takes noticeably Machiavellian approaches to fulfill its role as tax collector. At first it thoughtlessly floated the idea of taxing micro-vendors – pedicabs, tricycles, street vendors – clearly without a critical eye on the largest tax evaders and looking at the exact opposite direction. Now the bureau wants to go full speed ahead on this toll tax without considering how its amassing of extra funds will succeed by subjecting the Filipino people to hiked prices on food, necessities, everything. The wealthy won't feel it much as usual, but the poor will see more people join their plight in hunger. If only the per capita income of this country can jump that high that fast as well. If only.

Way to go, BIR and the second Aquino administration! Way to go.

Woe is the Pinoy consumer.

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