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Economy

SC issues 2 TROs on toll VAT, rate increase

August 13, 2010 4:25pm
The Supreme Court (SC) on Friday issued two temporary restraining orders (TRO) to stop imposition of higher tollway rates and the 12-percent value added tax (VAT) on toll fees, both scheduled to begin on August 16.

Supreme Court Spokesman and Court Administrator Jose Midas Marquez said the first TRO was issued in response to the petitions of former Nueva Ecija Rep. Renato Diaz and former Trade Assistant Secretary Aurora Timbol, who said that tolls on roads and highways are excluded from the list of services subject to VAT.

The high court also issued another TRO on two other petitions on the toll rate hikes, namely that filed by Albay Gov. Joey Salceda and that filed by lawyer Ernesto Francisco, who filed a supplemental omnibus motion or a status quo order.

Salceda and Francisco are against the 250-percent toll rate increase at the South Luzon Expressway (SLEX), Skyway, North Luzon Expressway, Manila-Cavite Toll Expressway, Southern Tagalog Arterial Road, and the Subic-Clark-Tarlac Expressway.

"A TRO has been issued to respondents... The Finance department and the BIR [Bureau of Internal Revenue] is given an unextendable period of 10 days to file their comments," Marquez said.

"With regards the other two cases... a TRO is being issued as the two cases are being consolidated," Marquez added.

No more fare hike petition

Meanwhile, the Southern Luzon Bus Operators Association (SOLUBOA) said it will no longer seek a fare hike after the SC issued the TRO.

SOLUBOA president Homer Mercado was quoted in a radio report as saying his group was earlier planning to file a fare hike petition before the Land Transportation Franchising and Regulatory Board on Tuesday if the court did not stop the toll rate hike.

The SOLUBOA earlier wanted fares for buses plying the SLEX to go up by at least 20 centavos per kilometer if the toll rate hike pushed through.

BIR Commissioner Kim Jacinto-Henares on Thursday said only the Supreme Court can stop the agency from implementing a VAT on tollway rates.

During a Senate inquiry, Senate President Juan Ponce Enrile, and Senators Ralph Recto and Franklin Drilon opposed the move, saying a "government service" tollways should not be subjected to a VAT.


Disappointed over court order

Sylvia Laureta, legal counsel of the South Luzon Tollway Corporation (SLTC), was quoted in a radio report as expressing "disappointment" over the court's order, but said they will have to heed it.

Laureta said the SLTC will only implement the order once it receives a copy of the TRO.
Before the high court's announcement, officials from the Toll Regulatory Board (TRB) even went into an "emergency meeting" on Friday supposedly to finalize the details of the scheduled toll hike on Monday.

The 250-percent increase of toll at SLEX is intended for the recovery of the P12 billion that South Luzon Tollway Corp. (SLTC) spent to rehabilitate what was then a two-lane road into a four-lane expressway.

TRB earlier claimed the investors who rehabilitated the highway were losing some P6 million a day, with the tally now at P234 million counting from early July.

The planned SLEX increase without VAT will result in the following rates for the stretch from Alabang to Calamba: P77 for Class 1 vehicles such as passenger cars (from P22), P155 for Class 2 vehicles such as light trucks and buses (from P43) and P232 for Class 3 vehicles such as heavy trailers/trucks (from P65), according figures previously released by the Toll Regulatory Board (TRB).

Factoring in the VAT, the latest matrices set SLEX tolls at P85 for Class 1, P170 for Class 2, and P255 for Class 3.

SLEX underwent a major face-lift recently under a Supplemental Toll Operation Agreement between the TRB, Malaysian-led South Luzon Tollway Corp., and Manila Toll Expressway Systems. — LBG/VVP/OMG, GMANews.TV