Pimentel laments ‘tax on tax,’ hidden electric bill charges

electricity bill


MANILA, Philippines — Senate Minority Leader Aquilino “Koko” Pimentel III has railed against the “tax on tax” and hidden charges in the billing statement of electricity consumers.

This is the reason why Pimentel asked the Department of Energy (DOE) to issue a directive requiring all distribution utilities to have a “standardized” billing statement that would reflect and detail all the charges being imposed on their consumers.

According to him, the standardized bill should reflect the charges on generation, transmission, missionary and system loss as well as subsidies for lifeline rate consumers and seniors, among others.

“Kasi ngayon ang nakikita ko meron ng VAT (value added tax) incorporated bago ma-determine yung total bill amount tapos papatawan pa ng VAT yung total bill amount. Sa loob meron ng VAT,” Pimentel lamented during Wednesday’s hearing of the Senate committee on energy.

(Because what I’m seeing now is we have VAT already incorporated before we determine the total bill amount, then there will be another VAT imposed on the total bill amount)

“Grabe naman itong masyadong ang daming nakatagong mga subsidies and charges as well as tax on tax already imposed,” he further said.

(There are too many hidden subsidies and charges as well as tax on tax already imposed)

DOE Secretary Raphael Lotilla partly blamed all these on Congress which approved the Electric Power Industry Reform Act or Epira.

“This is actually part of the Epira reform that the Congress provided for Mr. Senator but we can continue to adjust that,” Lotilla said during the same hearing.

“As to VAT on VAT, this is again a congressional decision as implemented by the Bureau of Internal Revenue— a tax on excise tax, a tax on systems losses, a tax on subsidies,” he pointed out.

The energy chief said they would need the help of Congress to address this but warned that the removal of tax would mean “lesser tax collection to support the national budget”

“So it’s really a case of balancing and we’d like to work with you to address this,” Lotilla said.