A new proposal in the Senate is seeking to ease the burden of rising electricity costs by granting tax relief to households with relatively low power consumption, as consumers continue to grapple with higher monthly bills.
The bill seeks to remove the value added tax (VAT) from the monthly electricity bills of households consuming 150 kilowatt-hour (kWh) or less, amid widespread “bill shock” from soaring electricity costs.
Senator Risa Hontiveros filed Senate Bill No. 2093 or the proposed “Kuryente Relief Act,” which may remove around P250 to P300 from the monthly power bills of Filipinos considered “energy poor” consumers, including low to lower-middle income households now struggling with higher power expenses.
“Dapat lang na palawakin ng pamahalaan ang tulong nito mula low income hanggang middle income households na kadalasan ay di naabot ng subsidy programs. Makakatipid ang maraming pamilya kung tatanggalin natin ang VAT sa bill ng mga kabahayang di naman kalakihan ang gamit sa kuryente,” the lawmaker said.
She explained that under her bill, residential households consuming 150 kWh monthly shall be exempt from paying VAT, and that this exemption shall be reflected in the statement of accounts of consumers “without prior need for application.”
“On average, a family of five living in areas like Metro Manila, with minimum wage income, consumes around 100 to 150 kWh per month, since they only need a handful of appliances or have limited air conditioning use. Marami ang ganyang pamilya na makikinabang sa VAT exemption,” she noted.
While support mechanisms such as the lifeline rate currently exist, Hontiveros said that these only provide “limited relief” since these are often strictly confined “to the most marginalized consumers.” In contrast, the bill will benefit all households who will meet the consumption rate limit.
“Ngayong sumisipa sa taas ang singil ng kuryente, pati middle income families ay nahihirapan na sa bayad sa kuryente. Our tax and energy policies should be more fair and adapt to this concerning reality,” she stressed.
The senator said that the bill will complement her earlier proposed measure, the proposed VAT Exemption on Systems Loss Act (Senate Bill 2076), which seeks to remove the VAT on systems loss charges, and lessen the financial burden on consumers.
“Puspusan nating isusulong itong Kuryente Relief Act at ibang reporma para matugunan ang daing ng mga consumers ngayong panahon ng krisis,” she added.