SEN. Bam Aquino urged the government to scrap the 12-percent value-added tax (VAT) on residential electricity to provide relief to Filipinos struggling with high power costs.
”If VAT is removed from residential electricity — not businesses, factories, but just residential — this could mean a bigger drop in the electricity bill of our citizens,” Aquino said on Wednesday.
He noted that VAT alone adds 12 percent to electricity charges, while system loss charges account for roughly another 5 percent to 6 percent of consumers’ bills.
”Perhaps, this is something we can also look at,” he added.
Aquino has filed Senate Bill (SB) 266, which seeks to exempt electricity sales by generation, transmission and distribution companies, as well as electric cooperatives, from VAT.
The bill would also remove VAT on services provided by franchise grantees of electric utilities, effectively taking the tax burden out of the electricity supply chain.
Aquino also filed SB 2047, seeking to reduce the VAT rate from 12 percent to 10 percent on goods and services, including petroleum products.
