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MANILA, Philippines — The 12-percent value-added tax (VAT) imposed on system loss charges in electricity bills should be removed because consumers should not be taxed for electricity they did not actually use, Sen. Mark A. Villar said in a statement on Wednesday.
To achieve this, Villar filed Senate Bill No. 2392, which seeks to exempt the system loss component charged by distribution utilities and electric cooperatives from VAT by amending Section 109 of the National Internal Revenue Code.
The measure covers recoverable technical and non-technical system losses allowed by the Energy Regulatory Commission (ERC) under the Electric Power Industry Reform Act of 2001.
“Our principle is simple: If the consumer did not use the electricity, he should not be charged tax for it. Our countrymen already pay high electricity charges, and they also have to pay for the system loss, which is not their fault. So we should immediately remove additional charges that we can,” Villar said in Filipino.
