Lawmaker insists on removal of VAT on power

The removal of the value-added tax (VAT) on electricity is “one of the most viable options for Congress” in providing economic relief to Filipinos amid the unabated hikes in prices of goods.

This is as House assistant minority leader and ACT Teachers Rep. France Castro countered Finance Secretary Carlos Dominguez III’s statement against a proposal to scrap the VAT on electricity.

“We need to stop this overtaxation of consumers of electricity and we will refile House Bill No. 249 in the 19th Congress to exempt electricity from VAT,” Castro said on Friday.

In a statement, the Makabayan lawmaker called the 12- percent VAT on electricity as “another burden on the already overtaxed shoulders of our 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,” she said.

She was responding to Dominguez’s rejection of the proposal to scrap the 12-percent VAT on generation charge to bring down the cost of electricity.

The proposal was first raised by Energy Regulatory Commission chair Agnes Devanadera, who claimed that consumers are taxed twice when paying their electricity bill.

The finance secretary said there was no double taxation in the electricity bill and that it only carries a single VAT of 12 percent.

Castro pointed out that the Philippines has one of the highest electricity costs in Southeast Asia.

“In Dominguez’s framework, he wants to tax everything, even the air we breathe,” she said. “What is worse, VAT is not only imposed on the generation of consumed power, but also on system loss charges. Thus, clearly making the Filipino people suffer twice over.”

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TAGS: Electricity, power, Tax, VAT