SUBSIDIZE ELECTRICITY CONSUMERS BY REMOVING VAT ON POWER INSTEAD OF P2B POWER SUBSIDY

“Pinapa-ikot lang tayo ng Malacanang, pretending it is out to give relief to consumers when all it is out to do is make taxpayers subsidize their own electric bills, and at a limited scope and time period at that. Malacanang can very well reduce our electric bills significantly and give much needed respite by removing the taxes it imposes on the power industry. Besides, removing the VAT on electricity is by itself a form of direct subsidy to consumers.”

Thus said Gabriela Women’s Party Representative Liza Maza in reaction to President Arroyo’s Energy Task Force’ proposed P2B power subsidy to four million small electricity users in the form of P500 cash dole-outs.

According to Maza, “President Arroyo, can, if she wants to, remove the 12% Value Added Tax (VAT) imposed on the generation, transmission and distribution of electricity. Furthermore, they can  remove the VAT being imposed on other charges in our electricity bills such as the systems losses, local franchise tax and lifeline rate subsidies.”

The Gabriela solon cited studies by the group POWER (People Opposed to Warrantless Electricity Rates) and AGHAM wherein consumers had to pay for as much as P0.93/kwH in taxes alone in April on top of the generation, transmission and distribution as well as systems loss charges. Removing the said taxes, as well as those imposed on the franchise tax and lifeline rate subsidies could reduce present electricity bills by as much as 10-20%. It is estimated that those who consume over 200kwH per month will enjoy a reduction of at least P206 from their P2000 bills if the VAT is removed.

“Unfortunately what has happened is that Malacanang opted to stage a boxing match between GSIS and Meralco in a fake bid to reduce electricity rates when it could very well do so without so much boardroom drama and advertising costs. Now, it wants to appear benevolent by proposing P500 cash dole-outs,” said Maza.

“We challenge Malacanang to give power consumers this much needed relief amid soaring oil and food prices by removing the VAT on electricity now.”

Gabriela Reps. Maza and Luz Ilagan, along with Bayan Muna solons Satur Ocampo and Teddy Casino are proponents of HB 4162 which seeks to remove the VAT on electricity.

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Filed under News Release, Utilities, VAT

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