Aquino Cabinet yields to Supreme Court on Vat on Toll Fees

 The BIR Commissioner promised that she would defend the implementation of the VAT on toll fees but Finance Department Cesar Purisima advised the President to wait for the Supreme Court decision.

Here is the story from GMA7.

It is now up to the Supreme Court to rule whether or not the proposed 12-percent value added tax on toll rates by is legal.

His economic managers advised President Benigno "Noynoy" Aquino III to wait for the Supreme Court decision on the petitions stopping government from imposing the VAT – a sales tax – on fees for the right to use the country’s expressways or toll roads.

In an interview with reporters, Finance Secretary Cesar Purisima said “Our advice is to wait for the SC decision. It’s now in the court and I think it is now up to the court to decide what to do with it."

The High Tribunal on August 16 restrained the Bureau of Internal Revenue from enforcing the VAT on fees charged by toll way operators against motorists.

Budget Secretary Florencio Abad said that the expected proceeds from the toll fee VAT would only be P1.6 billion a year, not P12 billion as earlier announced by former BIR Commissioner Joel Tan-Torres.

The proceeds from the toll rate VAT have been incorporated into the proposed P1.645 trillion budget for 2011.