The Philippine Rural Electric Cooperatives Association, Inc. (PHILRECA) on Thursday welcomed the growing clamor across various sectors and lawmakers for the removal of the multiple value-added tax on electricity.
PHILRECA said in a statement removing the VAT on electricity would directly benefit Filipino consumers regardless of their socio-economic background.
“We affirm that removing the VAT on electricity would cut the revenue of the government. However, this will reduce the total amount consumers need to pay for their consumption, especially for lower and middle-income households,” PHILRECA said.
PHILRECA and the Power Bloc, as its allies in the halls of Congress, have long prioritized this advocacy.
The group said that since the 18th Congress, the Power Bloc Representatives Presley De Jesus of the PhilRECA Party-List and Sergio Dagooc of the APEC Party-List prioritized the removal of VAT on electricity as a core legislative agenda.
Such line of action was followed again when the Power Bloc Representatives filed in the 19th Congress House Bill (HB) No. 32148, which amends Section 108(a) and 109(1) of the National Internal Revenue Code (NIRC) seeking to alleviate the heavy burden borne by member-consumer-owners (MCOs) by exempting the sale of electricity by generation, transmission, and distribution utilities from VAT.
The current VAT system on electricity allows the government to collect 12 percent VAT on generation, transmission, and distribution.
PHILRECA deems this multiple VAT as exorbitant and regressive in nature.
“In this framework, it takes a great portion or percentage of income from the poor compared to the rich,” the group said.
PHILRECA said the reliance of the Philippines on the importation of conventional energy sources such as fossil fuels, which are volatile due to supply and demand fluctuations, heavily exposes consumers to market price changes.
“As such, the Power Bloc representatives have also filed House Bill No. 9733 in the 18th Congress and House Bill No. 2153 in the 19th Congress, mandating the government to construct, operate, and maintain power-generating assets to ensure grid stability and supply reliability for ancillary and other purposes,” it said.
“This proposal seeks to allow the government to intervene and fill the gap in generation capacity, ensuring energy security and price stability for MCOs,” it said.
Congress recently started to deliberate on the possible amendments to the Republic Act No. 9136, otherwise known as the Electric Power Industry Reform Act of 2001, where the Power Bloc representatives advocate to encapsulate the provisions of HB No. 8733 and HB No. 2153.
“Through this proposed reform, the government will have a safeguard to regulate prices and ensure competition across generation companies, prohibiting the proliferation of market monopoly and abuses,” it said. With Dave Leprozo
