Series of bills removing VAT on utilities refiled by Makabayan bloc
INQUIRER FILE PHOTO
MANILA, Philippines — A series of bills seeking to remove value added tax (VAT) on several utilities like portions of electricity and water charges have been refiled by the House of Representatives’ Makabayan bloc.
In a statement on Thursday, Makabayan bloc through Alliance of Concerned Teachers party-list Rep. France Castro confirmed that House Bills (HB) No. 5994, 5995, 5996, and 5997 have been refiled at the 19th Congress on Wednesday.
HB No. 5994 seeks to amend the National Internal Revenue Code of 1997, particularly by excluding the system loss charge component of electric bills from companies and cooperatives from the 12 percent VAT. HB No. 5995, meanwhile, asks that electricity sold by generation, transmission, and distribution be VAT-exempt too.
Makabayan said in the bill’s explanatory note that HB No. 5994 has been filed in the 16th Congress by former Bayan Muna Reps. Neri Colmenares and Carlos Zarate, refiled in the 17th Congress and was passed on third reading. However, it was not enacted into law, leading the bloc to refile it again in the 18th Congress.
HB No. 5995, meanwhile, was filed as early as the 14th Congress by former Bayan Muna Rep. Teddy Casino, and was refiled in the succeeding Congresses.
It could be recalled that former Energy Regulatory Commission chairperson Agnes Devanadera asked President Ferdinand “Bongbong” Marcos Jr.’s administration to remove the VAT on generation charges as consumers are being subjected to double taxation due to VAT already being collected over the distribution charge.
READ: Scrap 12% VAT on power rates, incoming Marcos admin asked
Meanwhile, HB No. 5996 seeks to exempt services rendered by tollway operators from VAT. According to the Makabayan, removing VAT from tollway services would reduce toll fees at the North Luzon Expressway (NLEx), for Class 1 vehicles traveling the two ends of the expressway — from Balintawak Toll Plaza to Sta. Ines — by at least P32.04.
Class 2 vehicles plying the same route would have toll fees down by P80.14, and Class 3 vehicles get a toll fee reduction of P96.11
For the South Luzon Expressway (SLEx), Class 1 vehicles moving from Alabang to Calamba would get P10.29 off if the bill is passed, while charges for using the Skyway can have a P17.57 toll fee reduction.
“Imposing the VAT on tollway operations is definitely another burden on the already over-taxed shoulders of our people, especially for those whose incomes are barely enough to cover their basic needs,” Makabayan said in HB No. 5996’s explanatory note.
“In these times of unbridled hikes in the prices of oil, food, other commodities and services, it is the duty of Congress to work for economic relief to Filipino citizens. The clear-cut removal of VAT on tollway services in the current internal revenue law is the most logical option for Congress to act on,” they added.
HB No. 5997, the last of the bills refiled by the group, seeks to classify the services of water utility service providers plus the importation of equipment directly used in operating, maintaining, and improving distribution of water as VAT-exempt too.
Makabayan said the bill could address the problems brought by privatization of public services.
“The exemption of water services from VAT will provide not only relief, but could be one of the measures the Filipino people could rightfully demand to stem the effects of damages brought upon by the failure of the privatization of water distribution,” the bloc said.
“Exempting water services from VAT is one of the most viable options for Congress to immediately act on. Small revenue losses may easily be offset by the increased purchasing power of households and cheaper production costs, as well as increased efforts in the collection of other taxes,” it added.
The said bills are not the first VAT-exemption measures filed by Makabayan, which is composed of Castro, Gabriela party-list Rep. Arlene Brosas, and Kabataan party-list Rep. Raoul Manuel. Last October, they also submitted HB No. 5504, which seeks the removal of VAT on basic commodities to shield poor communities from rising prices of goods.
Under HB No. 5504, sale or importation of basic necessities consumed on a regular basis by poor families, like bread canned pork, beef, fish, and other marine products, instant noodles, biscuit, sugar, cooking oil, salt, laundry soap, detergents, firewood, charcoal, candles, and medicine classified as essential would be stripped of the 12 percent VAT.
