MANILA, Philippines — Senator Imee Marcos believes that current Energy Regulatory Commission (ERC) chairperson Agnes Devanadera deserves consideration for the Energy secretary post, lauding her proposal to remove value added tax (VAT) from power generation charges.
Marcos said on Friday that presumptive president Ferdinand “Bongbong” Marcos Jr. — her younger brother — should explore the possibility of appointing Devanadera to lead the Department of Energy (DOE).
“I laud Energy Regulatory Commission (ERC) chairman Agnes Devanadera for her advice to the next administration that the value-added tax (VAT) be removed on power generation and maintained only for power distribution,” the senator said in a statement.
“The transition teams of both the present government and presumptive president-elect Ferdinand Marcos Jr. should seriously consider ERC chairman Agnes Devanadera as the next chief of the Department of Energy,” she added.
The older Marcos said that Devanadera’s suggestion to remove VAT from power generation charges is in line with her proposals under Senate Bill No. 219 — which she believes is long overdue.
“Her clear solution for lowering electricity costs is long overdue and echoes one of my proposals in Senate Bill 219, filed during my first month as senator in July 2019, which seeks to exempt not only the sale of electricity from VAT but also the sale or importation of machines and equipment to be directly used in the generation, transmission, and distribution of electricity,” she said.
“Removing the VAT on electricity charges will benefit not only household and commercial end-users. It will also make the Philippines more attractive to foreign investors who balk at the country’s high power rates, arguably the highest in Asia,” she added.
Devanadera asked the next administration to stop the practice of collecting VAT from more than one component of the electric bill, saying that it is an issue of double taxation.
As of now, all of the electric bill’s components — except for universal fees and feed-in-tariff allowance charges — have been subjected to VAT. This means that generation, transmission, distribution, and even the fuel used by some power generation companies have an additional 12 percent charge due to VAT.
Devanadera said that customers consuming 200 kilowatt-hours and below can save as much as P100 on their monthly electric bill.
“This should be considered because it has an immediate impact on customers, especially those with monthly consumption of 200 kilowatt-hours and below. It translates to a discount of as much as P100,” the ERC chief told reporters in a virtual media roundtable.
According to Sen. Marcos, placing VAT on only one component would ease the load on consumers, especially with oil prices increasing as an offshoot of the Russia-Ukraine conflict.
“We need to mitigate the inevitable increase in the cost of power generation dependent on oil and gas, as global prices and supply of these commodities will continue to be volatile due to the Russia-Ukraine war,” Marcos noted.
There were rumors as to who would lead several key posts in the younger Marcos’ administration, but his spokesperson clarified last Monday that the search is still going on for most positions. Some of the items have already been occupied though, as presumptive vice president and incumbent Davao City Mayor Sara Duterte-Carpio is slated to get the education portfolio.