MANILA, Philippines — Senator Risa Hontiveros has formally moved to lower electricity costs for Filipino households by filing a bill that seeks to remove the value-added tax (VAT) on systems loss charges. In filing Senate Bill No. 2076 on Monday, May 4, the senator described the current practice of taxing energy losses as a “double burden” on consumers who are already struggling with the economic fallout of the ongoing Middle East conflict.
The proposed legislation aims to amend the National Internal Revenue Code (NIRC) to specifically exclude systems loss charges from transactions subject to VAT. Under the bill, systems loss is defined as the discrepancy between the electrical energy delivered to the distribution system and the actual energy received by residential consumers.
Hontiveros argued that because VAT is essentially a consumption tax, it should not be applied to electricity that was lost during distribution and never actually consumed by the household. Hontiveros pointed out that these charges are currently passed on to consumers in their monthly bills, representing an “already absurd” expense for energy that provides no direct benefit to the user.
“Itong VAT sa systems loss ay dobleng pasakit at insulto: Pinagbabayad na nga tayo ng systems loss na hindi natin napakinabangan, tapos pagbabayarin pa tayo ng buwis dito (This VAT on systems loss is a double pain and insult: We are already being made to pay for systems loss that we did not benefit from, and then we are made to pay tax on it),” she stated.
As global tensions continue to impact fuel and energy prices, this is positioned as a critical step in providing immediate financial relief by ensuring that Filipinos only pay taxes on the electricity they actually use.| Sheenalei Briana Rayos
