HOUSE Speaker Faustino “Bojie” G. Dy III on Monday welcomed the removal of the 12% Value Added Tax (VAT) on allowable system loss charges, saying the move could provide direct relief to Filipino households and businesses facing high electricity costs.
Dy thanked President Ferdinand “Bongbong” Marcos Jr. and concerned government agencies for acting swiftly to remove the tax on the allowable portion of system loss charges within the cap set by the Energy Regulatory Commission (ERC).
The Bureau of Internal Revenue (BIR), through Revenue Memorandum Circular No. 97-2026, has formally removed the 12% VAT on the allowable system loss charge.
“Every peso we can remove from the electricity bill matters, especially to families already stretching their budgets for food, education, transportation, and other basic needs,” Dy said.
He said consumers should not be burdened with taxes on electricity that they did not actually consume.
“Sa pagtanggal ng VAT sa allowable system loss, mababawasan ang singil na ipinapasa sa consumers at masisiguro nating hindi sila nagbabayad ng buwis para sa kuryenteng hindi naman nila aktwal na nagamit,” Dy said.
The Speaker also credited Marcos for directing government agencies to explore measures that could reduce electricity costs, while acknowledging the BIR, ERC and energy officials for working with the House of Representatives to implement the policy.
The BIR issuance came two days after the issue was discussed during the House’s LegisHear public consultation in South Cotabato, where House leaders said the removal of the VAT was already awaiting the corresponding revenue issuance.
During the consultation, Dy said the House was coordinating with concerned agencies to address the burden of high electricity costs on consumers.
Senior Deputy Speaker and South Cotabato 2nd District Rep. Ferdinand “Dinand” Hernandez said Dy had been meeting with energy officials and the BIR to pursue the VAT removal without waiting for new legislation.
Hernandez explained that system loss is not considered actual electricity consumption by the end-user, making the VAT removal a matter that could be addressed through regulatory and revenue issuances.
Asenso Pinoy Party-list Rep. Henry “Indy” Oaminal Jr. likewise said the ERC had already taken action and that the BIR issuance was the remaining step needed to remove the VAT from the portion of system loss passed on to consumers.
House leaders, however, stressed that the VAT removal is separate from efforts to eliminate system loss charges themselves.
Hernandez said he and Dy have filed legislation seeking to repeal or substantially change the system loss charges, noting that such a move would require congressional action.
The House is currently deliberating measures seeking to amend the Electric Power Industry Reform Act (EPIRA) and the Anti-Electricity Pilferage Act, including proposals aimed at addressing system loss and other electricity costs ultimately shouldered by consumers.
Dy said the immediate objective is to ensure that every available measure is pursued to reduce electricity expenses and provide relief to Filipino consumers.
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