Senator Sherwin Gatchalian is pushing for a government review of taxes embedded in electricity bills, as lawmakers renewed calls to reduce or suspend the 12-percent value-added tax (VAT) on power rates amid rising consumer complaints over high electricity costs.
Gatchalian, who chairs the Senate PROTECT Committee, asked the Energy Regulatory Commission (ERC) to study the potential impact of lowering or removing tax components in electricity pricing. The proposal comes as households grapple with higher utility bills and broader inflationary pressures linked to global fuel price fluctuations.
He said electricity consumers are currently burdened not only by VAT but also by additional charges such as local franchise taxes and other regulatory fees embedded in power rates.
“We will request the ERC to study the tax component,” Gatchalian said during the hearing.
ERC Chair Francis Juan said the commission has already begun discussions with the Bureau of Internal Revenue regarding the issue, signaling possible policy coordination on tax-related adjustments in the energy sector.
Lawmakers at the hearing expressed varying support for easing electricity taxes. Sen. Rodante Marcoleta reiterated his proposal to remove the 12 percent VAT on electricity, arguing that additional charges significantly contribute to higher monthly bills.
“These contributory costs are what make electricity expensive for consumers,” Marcoleta said.
Juan said he sees no objection to reviewing the tax structure, noting that any reduction would directly benefit both households and businesses through lower electricity costs.
Sen. Imee Marcos also backed calls to ease VAT on power consumption, saying the current system does little to alleviate financial pressure on consumers.
“If VAT is already clearly separated in unbundled billing, why not reduce it to help ease the burden on consumers?” Marcos said.
The proposal forms part of broader discussions in Congress on how to cushion Filipino households from rising utility and commodity prices, as policymakers weigh both fiscal implications and consumer relief measures.