Amid public clamor and the Supreme Court's issuance of a temporary restraining order (TRO) against the plan to impose the 12 percent value-added tax (VAT) on toll rates, President Benigno S. Aquino III said on Monday he has put on hold the tax measure and is contemplating on raising sin taxes on cigarettes and liquor.

Aquino, in an interview after administering the oath of office of his first SC appointee Associate Justice Ma. Lourdes Sereno, said that with the suspension of the imposition of the VAT on toll, the government's finance and legal teams are now studying Plan B, which might include the raising of sin taxes that Aquino favors.

Aquino also said the implementation of the 250 percent hike on toll rates in the newly-rehabilitated South Luzon Expressway (SLEx) is more of a priority to him.

“The VAT (on toll) actually I've put it on hold as of last week. This is still subject to a lot of discussions. My first priority is the SLEx – the impending 250 percent increase, and the initial solution that we had sought to employ to address that increase is not panning out,” Aquino said.

Aquino has been lamenting the SLEx toll hike that he even said in a jest last Friday, during the oath-taking of the Organisayon ng Pilipinong Mang-aawit officers, that his hair continues to become thinner day by day because of the problems he inherited from previous administrations which include the planned 250 percent hike in toll rates of the Alabang (Muntinlupa)-Calamba (Laguna) tollway.

Aquino said that to mitigate the 250 percent increase in the toll rates, the government might use the state-owned PNCC's share in the new SLEx operator, South Luzon Tollway Corp. to lessen the percentage of the toll hike. It was learned that PNCC owns 20 percent of the SLTC.

The Supreme Court last Friday also issued a separate TRO to the SLEx toll increase following a petition questioning its legality.

“There are also implications to the future investors in our country. I'm hoping to meet (Finance) Secretary (Cesar) Purisima today (Monday) and (Bureau of Internal Revenue) Commissioner Kim Jacinto-Henares also. Sec. Purisima just came back from setting the groundwork of the United States trip in September. I hope he has recovered from jet lag and we will be able to meet today,” he said.

Though he did not mention whether the government would still question the Supreme Court decision, the President stressed that he was authorized by law to suspend the imposition of taxes particularly those which could affect economic activities.

“I understand the President is authorized to suspend the imposition of certain taxes. There is a study ongoing on implications. As far as SLEx is concerned, the increase in toll rates (will result in) increase in transportation fares. And the VAT is another cost that might deter economic activity so this all will be discussed. As for the Plan B, I'm hoping to finish it with Sec. Purisima today (Monday) or tomorrow (Tuesday),” Aquino said.

Asked how long will the suspension of VAT on toll lasts, Aquino said: “My priority is the 250 percent increase in the SLEX fee. I have been advised that the PNCC franchise has lapsed since 2007. It has been neglected for three years.”

“The authority to collect that arises from that franchise seems to be in question. All of these matters are being studied by both the legal teams and the finance teams and they will be giving me recommendations, hopefully at the very latest by tomorrow,” he added.

The “Plan B” however apparently does not mean the creation of new taxes, said Aquino, explaining that there is no necessity to do so according to his economic advisers.

“Even the budget has been attuned to managing the deficit, going to conflicting needs of pump priming, managing the inflation level, and also managing the deficit. Am I open (to new taxes)? At this point in time, we have not been advised that there is a necessity to do so,” he said.