Tolentino bill exempts electricity, internet from VAT

Exempting electricity and internet services from the coverage of the 12% value-added tax (VAT) will boost industries, help lower prices, and alleviate Filipinos’ daily lives. These were among the reasons cited by Senate Majority Leader Francis 'TOL' Tolentino in filing Senate Bill No. 2970, which seeks to amend the National Internal Revenue Code by scrapping VAT from the two vital utilities.

Exempting electricity and internet services from the coverage of the 12% value-added tax (VAT) will boost industries, help lower prices, and improve the quality of life of Filipinos. These were among the reasons cited by Senate Majority Leader Francis ‘TOL’ Tolentino in filing Senate Bill No. 2970, which seeks to amend the National Internal Revenue Code by scrapping VAT from the two vital utilities.

MANILA, Philippines – Filipino workers and students may soon get some relief from high cost of electricity and internet, services after Senator Francis ‘TOL’ Tolentino filed a bill seeking to exempt the two services from the 12% value-added tax (VAT).

In filing Senate Bill 2970 on Thursday, Tolentino noted that electricity costs in the Philippines are among the highest in the region – a situation that may stifle economic growth and even cause deindustrialization.

On the other hand, he said exempting internet services from VAT will help promote digital inclusion, ensuring that all Filipinos can take part in the digital economy.

“The important role of electricity and internet in our daily lives, particularly in education and remote work cannot be overstated. As more educational institutions transition to online platforms and businesses adopt flexible work arrangements, affordable internet access becomes even more vital,” Tolentino said in his bill.

“By eliminating VAT on electricity and internet sales and services, the government would alleviate financial pressures on consumers and businesses alike, fostering a more inclusive and robust digital landscape,” he added.

Tolentino’s bill aims to amend Section 108 of the National Internal Revenue Code of 1997, removing sales of electricity by generation and services of electric utilities from VAT.

It expressly exempts from VAT the sale of electricity by generation, transmission and distribution companies and electric cooperatives; services of franchise grantees of electric utilities; and sales and services of internet service providers (ISPs).

“This bill aims to alleviate the rising costs of essential commodities and improve the overall quality of life for Filipinos,” Tolentino pointed out.

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