IMPOSITION of the value-added tax (VAT) on tolls will push through next week as scheduled, with users of the South Luzon Expressway (SLEx) to be hit particularly hard based on adjusted fees approved by regulators.

The Toll Regulatory Board (TRB) on Saturday detailed new charges for six Luzon tollways. The higher tolls — which take into account the 12% VAT — take effect beginning 10 p.m. on August 16, the date that SLEx adjustments approved earlier this year are also set to be imposed.

For users of the highway — the main route to industrial zones south of Metro Manila — the two adjustments mean tolls will nearly quadruple.

Businessmen claimed the higher fees would raise the cost of doing business and hence, lower their competitiveness.

The TRB, in its Saturday notice, said: “Any interested expressway user shall have the right to file, within a period of 90 days from the date of publication of this notice, a petition to review the imposition of VAT…”

The biggest increases, based on matrices provided by the TRB, will be at the SLEx where tolls were last adjusted in March 2008. In particular, drivers of Class 1 vehicles — cars or jeepneys — entering Alabang and exiting at Calamba will have to pay P85, almost four times more than the current P22. The rate for Class 2 vehicles — light trucks and buses — will rise to P170 from P43, while that for trailers/large trucks will be P255 instead of P65.

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INFLATION WAS STEADY at 3.9% last month, raising the prospect of policy rate settings staying unchanged as the Bangko Sentral ng Pilipinas (BSP) seeks to spur economic growth.

The July inflation number, within the BSP’s 3.5-4.4% outlook for the month and just under a mean forecast of 4% in a BusinessWorld poll of economists, is the lowest since November 2009.

Core inflation, which excludes volatile price movements of products such as food and energy, inched up to 3.9% in July from 3.8% in June.

Economists were not surprised with the July number, noting a lack of price pressures from food and oil. Their outlook for inflation was mixed but the consensus was that monetary settings would likely remain where they are now.

“The July number is in line with my forecast and it is not surprising as food and oil prices are relatively stable,” University of Asia and the Pacific economist Victor A. Abola said.

University of the Philippines economist Benjamin E. Diokno said: “The figure is fundamentally unchanged relative to June numbers and there’s no reason for the BSP to change its current policy as price increases continue to be mild.”

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THE GOVERNMENT wants to raise at least $1.1 billion from the sale of retail Treasury bonds (RTBs) this month and a global peso bond issue later this year to partly fund a record 2010 budget gap, officials yesterday said.

Finance Secretary Cesar V. Purisima said the new government was looking at a minimum size of $500 million for the planned sale of global peso bonds before the end of the year.

“I think it should at least be half a billion dollars,” Mr. Purisima told reporters when asked about the size of the offer.

“That would probably be the minimum, because lower than that might not meet the distribution requirements to achieve my goal of really establishing a market outside the Philippines.”

Officials have said the Philippines, Asia’s largest sovereign issuer of foreign currency debt, plans to offer global peso bonds with maturities of five to 10 years as part of efforts to manage its foreign currency exposure. The bonds are expected to be denominated in pesos, with settlement in US dollars.

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MORE BUSINESS GROUPS are pressing Congress for tax policy reforms and laws to improve governance, a review of proposed legislative priorities showed.

The wish lists of the Federation of Philippine Industries (FPI), American Chamber of Commerce of the Philippines (AmCham) and the European Chamber of Commerce of the Philippines (ECCP) share several bills which their leaders said were needed to level the playing field, shore up state revenues, and hold the government more accountable.

These come on top of an earlier legislative agenda, released by the Philippine Chamber of Commerce and Industry (PCCI), which sought similar measures.

The most common item among the lists is a bill rationalizing fiscal incentives, with all four groups urging the immediate passage of the measure, aimed at streamlining the tax perks granted to direct investments.

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The drama at Philippine Airlines continues as the government-led mediation yesterday failed to resolve the labor row between the flag carrier and its pilots. Click this to read the full story http://www.bworldonline.com/main/content.php?id=15197

A GOVERNMENT TIMELINE to raise the tax effort to 15% of total economic output has been extended by a year to 2012.

From a 2010 goal of 13.9%, the Development Budget Coordination Committee (DBCC) wants the ratio raised to 14.5% in 2011 and further to 15.2% the following year.

Prior to a DBCC meeting last July 8 where changes to this and other targets were approved, Bureau of Internal Revenue (BIR) chief Kim S. Jacinto-Henares announced that the government was aiming for a 15% tax effort in a year’s time as ordered by President Benigno C. Aquino III.

Yesterday, however, she told reporters at the sidelines of the agency’s 106^th anniversary celebration that the administration was now aiming for a “15% tax effort within the next two years.” She later clarified in a telephone interview that the 2011 target was her own.

“The reason why I said the 15% tax effort must be achieved by 2011 is because I think the earlier we achieve it, the better,” Ms. Henares said, adding that a high target will push her agency to work harder.

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