SOLONS BACK BILL TO EXEMPT ELECTRICITY SALE FROM VAT

SOLONS BACK BILL TO EXEMPT ELECTRICITY SALE FROM VAT

Party-list lawmakers push to exempt electricity as a commodity from the 12 percent Value-Added Tax (VAT) in order to provide economic support to consumers.

Farmers’ voice in Congress AAMBIS-Owa, through its lone Representative Sharon S. Garin co-authored House Bill 344, introduced by Bayan Muna Party-list Representatives Carlos Isagani Zarate and Neri Colmenares, which will in effect  amend the National Internal Revenue Code of 1997.

“The Philippines has already one of the highest costs of electricity in Southeast Asia. For instance, the 2011 addition of 5.8 centavos per kilowatt-hour (kWh) on generation charges plus the 12 percent VAT imposed raised the price of electricity at P9.55 per kWh. For a household consuming 200kWh of electricity a month, the VAT is estimated at P191, an amount quite substantial to the average working Filipino,” Representatives Colmenares and Zarate said in the explanatory note of the proposed measure.

Rep. Garin, a Certified Public Accountant and taxation lawyer by profession, urges fellow legislators to pass the bill describing the measure as a “direct form of economic relief” for all Filipino households and businesses.

“Supposed revenue losses to be incurred by the government will definitely be compensated by increase incorporate income tax and indirect taxes because people will buy and spend more,” Rep. Garin, Vice-Chair of the Committee on Ways and Means said.

House Bill 344 is currently pending before the 75-member Committee on Ways and Means in the House of Representatives.

The Ways and Means Committee is one of the 59 standing committees in the House of Representatives. It covers all matters directly and principally relating to the fiscal, monetary and financial affairs of the national government including tariff, taxation, revenues, borrowing, credit and bonded indebtedness. /MP