MANILA, Philippines — Malacañang maintained that the suspension of the Value Added Taxes (VAT) on system loss charges is to reduce the cost of Filipino households, dismissing concerns about the estimated P10 billion annual revenue loss from the removal of the said tax.
In a press briefing on Tuesday, Palace Press Officer Claire Castro recognized that while the annual revenue loss is possible, the Department of Finance (DOF) and the Bureau of Internal Revenue (BIR) have alternative mechanisms to offset the fiscal gap through improved tax administration, digital service VAT reforms, and investment growth.
“The objective of this policy to remove VAT from allowable system loss charges is not to immediately figure out how to recoup the potential revenue loss,” said Castro in Filipino.
“The president and the administration are focused on how to ease the burden our fellow citizens face regarding the high cost of basic goods—a burden that would only be compounded by high electricity bills,” she added.
In his state of the nation address back in July, Marcos called to scrap system loss charges, which he said unfairly puts the burden of lost transmission of electricity on consumers.
