By Benjamin Cuaresma
MANILA — Sen. Bam Aquino is pushing for the removal of the 12 percent value-added tax (VAT) on residential electricity as part of efforts to reduce power costs for Filipino households.
Aquino said exempting household electricity from VAT could provide immediate relief to consumers, particularly when combined with measures to address system loss charges that account for about 5 percent to 6 percent of electricity bills.
“Kung tatanggalin po iyong VAT sa kuryente ng mga residential — hindi po mga negosyo, mga factory — but just residential — this could mean a bigger drop in the electricity bill of our citizens,” Aquino said during a recent Development Budget Coordination Committee briefing, according to a statement issued Wednesday.
Aquino has filed Senate Bill No. 266, which seeks to remove VAT on electricity sold by generation, transmission and distribution companies, as well as electric cooperatives.
The proposal would also exempt from VAT the services provided by franchise holders of electric utilities.
Aquino said eliminating the tax would reduce the amount passed on to consumers through their monthly electricity bills.
He is also seeking broader tax relief through Senate Bill No. 2047, which proposes cutting the VAT rate on goods and services, including petroleum products, from 12 percent to 10 percent.
Separately, Aquino has filed Senate Resolution No. 375 seeking a legislative inquiry into the recent power rate increase of Manila Electric Co. (Meralco), particularly the way electricity subsidies for low-income households are financed.
The resolution seeks to examine the existing cross-subsidy system, under which some electricity consumers shoulder charges associated with discounts provided to qualified low-income households and senior citizens.
Aquino said the arrangement currently adds about PHP 20 to PHP 100 a month to the electricity bill of an average family.
He said assistance for the poorest households should remain a government priority but argued that the cost should be funded through the national budget rather than transferred to other consumers through their electricity bills.
ia/xf
