VAT removal on electricity gains DOE’s support

However, decision rests with Congress and economic managers.

A proposal to remove value-added tax (VAT) on electricity may soon bring cheaper power rates for many Filipinos, as lawmakers and energy officials push measures aimed at lowering household utility costs.

This comes after the Department of Energy (DOE) expressed support for removing VAT to help bring down electricity prices, especially during the summer months as supply fluctuates. A 12% value-added tax is imposed on all goods and services consumed in the Philippines, including electricity and fuel.

The DOE backed proposals to remove VAT on electricity but said the decision ultimately lies with Congress and economic managers.

The economic tightrope

In the Senate, a bill has already been filed seeking to remove VAT on system loss charges, which typically amount to 5% of the total electricity bill and accounts for power lost due to technical and non-technical factors.

Amid continuous fuel and electricity price hikes, labor groups like Kilusang Mayo Uno have called on authorities to expedite efforts to ease the burden on consumers, specifically urging the removal of VAT on all products and basic utilities.

 

 

Could your electric bill drop by 12%? The DOE supports the removal of VAT on electricity to combat soaring utility costs.