ABOLISH VAT ON ELECTRICITY NOW! LOWER POWER BILLS FOR ALL FILIPINOS

We, the Filipino people, collectively call on the House of Representatives, Senate of the Philippines, and all concerned government agencies for the removal of the 12% Value-Added Tax (VAT) on electricity. 

The Issue:

The cost of electricity in the Philippines remains one of the highest in Southeast Asia, ranking third highest behind Singapore and Japan in 2024.

A significant portion of the high cost of electricity comes from government-imposed taxes, particularly VAT; and at every level of the supply chain, electricity is being taxed, which greatly adds to the total cost of the power bill that each member-consumer-owner (MCO) pays. Currently, the 12% VAT is imposed on generation, transmission, distribution, and other charges such as system loss and even subsidies passed on to MCOs (lifeline subsidy and senior citizen subsidy).

Recognizing the need and right to access essential utilities such as electricity at an affordable cost, removing the multi-layered VAT collection will be an effective solution that will make a real difference in the lives of all Filipinos.

A Legislative Effort Long Ignored:

Since the 18th Congress, the Power Bloc representatives Hon. Presley C. De Jesus of the PhilRECA Party-List and Hon. Sergio C. Dagooc of the APEC Party-List has prioritized the removal of VAT on electricity.

On 31 July 2019, the Power Bloc Representatives jointly filed House Bill No. 3248, amending the Sections 108(a) and 109(1) of the National Internal Revenue Code (NIRC) that sought to alleviate the heavy burden borne by Member-Consumer-Owners (MCOs) by exempting the sale of electricity by generation, transmission, and distribution utilities from VAT.

In the 19th Congress, this advocacy continued. On July 19, 2022, the Power Bloc refiled the measure as House Bill No. 02151, carrying the same clear intent: to eliminate VAT at every level of the electricity supply chain.

Several other similar bills were also filed by other lawmakers. However, despite consistent and repeated efforts, these bills have regrettably remained on the shelves.

Our Collective Call:

• To immediately hear, prioritize, and pass legislation removing the VAT on electricity.
• Exempt all stages of the energy supply chain (generation, transmission, distribution, systems loss, and subsidies) from VAT
• Enact this reform as part of a pro-people energy policy that prioritizes affordability, accessibility, and social equity.

Delaying passage of legislation is a setback, stand up for the consumer’s welfare!