OPPOSITION SEN. ALAN PETER CAYETANO has accused President Macapagal-Arroyo of failing to implement a provision of the Electric Power Industry Reform Act (Epira) which called for a uniform implementation of taxes for both renewable and nonrenewable energy sources.
At a hearing on energy in the Senate on Friday, Cayetano said that Section 35 of Epira allowed Ms Arroyo to implement a uniform tax or levy for all power sources—coal and indigenous energy sources.
He said the President, by using the prerogative, would immediately bring down electricity rates.
Cayetano quoted the section: “The President of the Philippines shall reduce the royalties, returns and taxes collected for the exploitation of all indigenous sources of energy, including but not limited to, natural gas and geothermal.”
Cayetano said that the law was aimed at effecting “the parity of treatment with the existing rates for imported coal, crude oil, bunker fuel and other imported fuels.”
Currently, the government collects taxes equivalent to four centavos per kilowatt hour for power generated by imported coal, but 30 centavos to 70 centavos for geothermal and P1.30 for natural gas.
“So put your money where your mouth is, Madam President, and lower the taxes on these and then make sure that everyone else—Manila Electric Company, National Power Corporation and other distribution utilities—also toe the line and share the burden to help lower power rates,” he said.
He said that due to the glaring disparity in the taxes levied on fuel sources, investors would rather build coal-fired power plants, which were expensive and caused pollution, rather than plants devoted to harness wind, solar, geothermal power and biofuels.
Cayetano also pointed that Epira called for a zero-rated tax on oil and power.
Thus, he said, Congress in effect clearly amended Epira when it passed the expanded value-added tax law imposing 12-percentage tax on oil and power.
“Pursuant to the objective of lowering electricity rates to end users, sales of generated power by generation companies shall be value-added tax or zero-rated,” said Cayetano, quoting Epira.
