A measure has been filed in the Senate seeking to remove the Value-Added Tax (VAT) imposed on systems loss charges, in a bid to help reduce the burden of rising electricity costs on Filipino consumers.
Senate Bill No. 2076 proposes amending the National Internal Revenue Code to exclude systems loss charges from VAT coverage. The move aims to ease monthly power bills by eliminating what proponents describe as an added layer of cost passed on by electric utilities.
Systems loss refers to the difference between the electricity fed into the distribution system and the amount actually delivered to end users, which is typically charged to consumers. Under current rules, these charges are subject to VAT, further increasing overall electricity expenses.
Senator Risa Hontiveros, who authored the bill, said consumers should no longer shoulder what she described as a “double burden” of paying both the systems loss charge and the corresponding tax.
She added that removing VAT on these charges would provide immediate relief, particularly as electricity demand and costs rise during the summer months.
The proposal forms part of a broader set of planned measures aimed at cushioning households, especially low-income families, from increasing utility costs and other basic expenses.