TNCs Not Exempted from Remitting Fair and Correct Taxes to Government – LTFRB

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Land Transportation Franchising and Regulatory Board (LTFRB) Chairman Martin B. Delgra III today clarified that Transportation Network Companies (TNCs) are required to pay fair and correct taxes to the government, and that insinuations that DOTr Secretary Art Tugade wants a “share” from their earnings is utterly malicious.

In a press conference in Malacanang on Tuesday, Secretary Tugade was asked to comment on the directive of the LTFRB requiring TNCs to deactivate “colorum” driver-partners from their platform. The Transportation chief said anyone who wants to get into the business of public transportation must submit themselves to regulation.

Tugade said regulation would not only level the playing field and guarantee accountability, but also allow the government to collect the correct taxes from TNCs.

“Ang punto ni Secretary Tugade at ng LTFRB, kapag colorum ang isang sasakyan, walang habol dyan ang gobyerno. Paano mo masisingil ng tamang tax kung hindi nga sila rehistrado?” Chairman Delgra explained. “Like any business, TNCs and their partners are covered by laws of taxation and they must give what’s due to the government," he added.

Based on the numbers given by Uber and Grab, there are 56,000 activated Transport Network Vehicle Services (TNVS) drivers, including the 3,000 with approved franchises. Out of these numbers, the two TNCs admitted there are TNVs which are accredited to both uber and grab. This means some 40,000 are plying the streets without being required to file tax returns to the Bureau of Internal Revenue (BIR).

“The problem is how can the government be assured that it is getting its fair share from these TNCs when majority of their drivers do not have franchises? Under existing laws, the TNCs, owner of vehicles, and drivers who are earning from this business all have tax accountabilities,” Delgra said.

On October 29, 2015, the BIR issued Revenue Memorandum Circular No. 70-2015 or the guidelines for the taxability of TNCs and their partners.

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