MANILA, Philippines ─ Akbayan Party-list Rep. Chel Diokno welcomed the Energy Regulatory Commission’s commitment to expedite the removal of the 12-percent value-added tax on electricity system loss charges, saying the move could provide relief to millions of Filipino consumers facing high electricity bills.
Diokno’s remarks during the Committee on Appropriations’ hearing on the budgets of the Department of Energy, as he pressed ERC Chairperson Atty. Francis Saturnino Juan on when consumers could expect to feel the impact of the VAT removal.
“So many of our fellow citizens fall victim to ‘bill shock’ whenever they receive their electric bills. And many were pleased when the president spoke about the need to remove the system loss charge, as well as the 12 percent value-added tax imposed on it,” the lawmaker said in Filipino.
In response, Juan said the ERC has issued Resolution No. 26, classifying the system loss charge as a government-mandated charge. This would allow it to be excluded from the VAT base. The ERC is coordinating with the Bureau of Internal Revenue for the issuance of a Revenue Memorandum Circular (RMC) to implement the change.
Juan further noted that the Resolution was published on September and would take effect after 15 days.
Once the BIR issues its corresponding RMC, the ERC will direct distribution utilities to update their billing systems. Implementation could begin as early as October or November, subject to the effectivity of the BIR issuance and the time utilities need to make the necessary adjustments.
“Regarding the 12 percent VAT on system loss and the actual removal of system loss, we will eagerly await that,” Diokno said.
