Manila: The Department of Energy (DOE) emphasized the need for a balanced approach in evaluating proposals to suspend, reduce, or remove the value-added tax (VAT) on electricity. The DOE highlighted the importance of considering the benefits to consumers while also taking into account the government's fiscal responsibilities.
According to Philippines News Agency, the DOE stated that while such proposals may help lower power costs for consumers, their impact on the government's ability to provide essential public services must also be factored into the decision-making process. The DOE urged that these proposals be thoroughly examined by the country's economic managers and Congress.
The DOE expressed its readiness to offer technical insights on how proposed measures could affect the energy sector, supporting a comprehensive government strategy that considers both consumer welfare and fiscal sustainability. Furthermore, the DOE emphasized the pursuit of electricity affordability through ongoing energy sector reforms, including efficient generation, improved grid reliability, enhanced competition, and responsible energy use.
The discussion around reducing or removing VAT on electricity has been ongoing, gaining more attention amid oil supply challenges due to the Middle East crisis.
In a related development, a new Senate bill aims to provide VAT exemptions for households consuming 150 kilowatt-hours (kWh) or less. Senator Risa Hontiveros introduced Senate Bill No. 2093, also known as the 'Kuryente Relief Act,' on Tuesday. The bill seeks to offer targeted relief to families struggling with rising power costs by potentially reducing monthly expenses by PHP250 to PHP300 per household.
Hontiveros underscored the importance of extending government assistance beyond low-income families to include middle-income households, which are often excluded from subsidy programs. The proposed bill would automatically exempt households using up to 150 kWh monthly from VAT, complementing existing lifeline rates and broadening consumer support.
