Filipino households could get some relief from high power bills if the government removes the 12% value-added tax (VAT) on residential electricity, Senator Bam Aquino said.
Aquino raised the proposal during the Development Budget Coordination Committee (DBCC) briefing, saying removing VAT could give consumers a bigger cut in their monthly electricity bills.
“Kung tatanggalin po iyong VAT sa kuryente ng mga residential—hindi po mga negosyo, mga factory, but just residential, this could mean a bigger drop in the electricity bill of our citizens,” Aquino said.
He said the proposal could be paired with the removal of system loss charges, which make up around 5% to 6% of electricity charges.
“Iyong VAT on electricity is 12 percent right away from the electricity bill. Baka this is something we can also look at,” he added.
Aquino has filed Senate Bill No. 266, which seeks to make the sale of electricity by power generation, transmission and distribution companies, including electric cooperatives, VAT-exempt.
The bill would also remove VAT from services provided by franchise holders of electric utilities.
Aquino has also filed Senate Bill No. 2047, seeking to cut the VAT rate on goods and services from 12% to 10%.IMT
