Alvarez vows to reject proposal on coal tax hike

“Definitely not.”

This was the terse answer of Speaker Pantaleon Alvarez to the Senate’s controversial proposal to raise coal tax by 3,000 percent in the bicameral discussion on the government’s tax reform measure.

He said the coal industry would only pass on the burden of additional taxes to consumers, who would bear the brunt of skyrocketing electricity rates.

“We will not allow that. Definitely not,” he said in a radio interview on Thursday when asked about the Senate’s proposed amendment to the Tax Reform for Acceleration and Inclusion (TRAIN) bill pending approval in the bicameral conference committee.

The coal tax is one of the contentious issues in the deliberations on TRAIN. The House and the Senate are reconciling differences between the two versions of the bill, which they hope to ratify before Congress goes on recess next week.

Under the Senate version of the tax reform measure, a 3,000-percent increase in the coal tax shall be collected in three tranches until 2020 on top of the current P10 excise tax.

The tax shall be raised to P100 in 2018, P200 in 2019, and P300 by 2020.

No such tax is included in the House version of the TRAIN.

“Let us look at this objectively from the point of view of the consumers. If, for example, you raise additional taxes on coal power plants, industry players may not even complain because they will just pass it on to consumers,” Alvarez said.

This would further create a ripple effect of price increase in goods and services, he said.

“We’re looking out for the welfare of the consumers. We already have the highest power rates in Asia,” he said.

The Speaker said he had even made discussions on possible measures to lower power rates with Energy Secretary Alfonso Cusi for several months.

“In fact, I was taken aback because for several months, Secretary Al Cusi and I had been talking about how to lower electricity rates. Now here we will pass a measure that will hike it up. That’s crazy,” Alvarez said.    /kga