QUEZON City 4th District Rep. Jesus “Bong” Suntay has filed a measure that seeks to remove the 12-percent value-added tax (VAT) on electricity consumption for all end-users, including residential, agricultural, commercial and industrial consumers.
Under House Bill (HB) 10160, or the Electricity VAT Relief Act, electricity sales would be exempt from the VAT.
HB 10160 also requires power distributors to clearly reflect the VAT savings in consumers’ monthly billing statements.
“The removal of VAT on electricity is one of the most direct and meaningful forms of tax relief that Congress can provide,” Suntay said in his explanatory note.
“Unlike subsidies that benefit only selected sectors, a VAT exemption on electricity benefits every Filipino consumer,” he said.
Suntay noted that the measure could also benefit the broader economy by reducing operating costs for businesses, manufacturers and agricultural producers, which could in turn help bring down the prices of goods and services.
The proposed law also directs the Energy Regulatory Commission (ERC) to ensure that the VAT exemption is fully passed on to end-users.
“Electricity is no longer a luxury. It is a necessity for every family, school, hospital, business and farm. If we reduce the VAT on electricity by 12 percent, the monthly expenses of every household will automatically decrease,” Suntay said.
The Philippines has some of the highest electricity rates in Southeast Asia, with the national average hitting P12.43 per kilowatt-hour.
