MANILA, Philippines — Sen. Risa Hontiveros on Monday filed Senate Bill (SB) 2076 that will remove the value-added tax (VAT) on systems loss charges currently being passed on to consumers’ monthly electricity bills.
The senator said SB 2076 will amend the National Internal Revenue Code to exclude systems loss charges from transactions subject to VAT.
Under the bill, systems loss refers to “the difference between the electrical energy delivered to the distribution system (energy input) and the energy delivered to the residential household consumers (energy output).”
She said Filipino consumers should no longer be made to carry the “double burden” of paying for VAT on top of the “already absurd” systems loss charges passed on by electric utilities.
"We must immediately end this unfair arrangement, especially now that electricity costs are going up,” Hontiveros said in a statement.
She said that VAT is a consumption tax on goods and services. "Systems loss charges - which represents losses in the distribution and delivery of electricity, are neither goods nor services purchased by power consumers."
“By removing the VAT on systems loss charges, we are not just making our tax policies more fair and just - we are also providing immediate relief to consumers facing higher electricity bills this summer season,” Hontiveros said.
She said that the bill is only the first of her planned package of legislative measures to provide assistance to power consumers, especially low-income households, amid rising costs of basic commodities due to the Middle East war.
