House committee to tackle tax exemption on energy

CEBU, Philippines – After more than two years since it was submitted, the House Bill, which seeks to exempt electricity bills from the 12 percent value added tax, will be discussed at the Committee on Ways and Means this week.

The author of the proposed measure, Bayan Muna Representative Neri Javier Colmenares said that he filed the proposed bill in 2013 and has been asking his fellow legislators to support the passage of the bill as this would mean lowering electricity bills of electric consumers nationwide.

“Matagal na itong naka pending sa Congress, 2013 pa. Sana suportahan ito ng mga congressmen natin para naman maisa batas na ito,” said Colmenares.

Colmenares and the co-sponsor of the bill, Representative Carlos Isagani Zarate, explained in the proposed bill that VAT on electricity is another burden on the already “over-taxed shoulders” of the people, especially those whose incomes are barely enough to cover their basic needs.

“In time of unabated price increases of fuel, food and other commodities, it is the duty of Congress to provide economic relief to the Filipino people.

The removal of VAT on electricity is one of the most viable options for Congress to immediately act on,” the house bill stated.

It explained that the Philippines already has one of the highest cost of electricity in Southeast Asia and what makes it worse is that VAT is not only imposed on the generation of consumed power but also on system loss charge.

Further, the proposed bill stated that despite the obvious benefit to the country’s fiscal management, it is imperative that Congress act on the removal of VAT on electricity as it is the fastest and most direct form of economic relief for Filipino households and businesses.

“Whatever revenue losses to be suffered by government will definitely be offset by the increased purchasing power of all households as well as cheaper production costs, redounding to a more robust and equitable economy,” the proposed bill stated.

Colmenares further said that once the bill is passed into law, the effects would be a reduction of electricity bill by at least P300 per month.

“Ang kuryente kasi is inflationary, kapag tumaas siya, tumataas din yung mga commodities,” said Colmenares. —/ATO (FREEMAN)