Dy thanks Marcos for directing VAT removal on system loss charge

MANILA, Philippines — The removal of the 12-percent value-added tax on allowable system loss charges in electricity will provide direct relief to consumers, Speaker Faustino “Bojie” G. Dy III said in a statement on Monday thanking President Ferdinand Marcos Jr. and concerned government agencies for acting quickly to bring down power costs.

“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, shortly after the Bureau of Internal Revenue (BIR) issued a circular removing the system loss VAT within the cap approved by the Energy Regulatory Commission (ERC).

“We also thank the BIR, ERC, and our energy officials for responding quickly and working with Congress to turn this into actual savings for our consumers,” he added.

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READ: Sona promise: Lower power bills as VAT on system loss out

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The BIR issued the circular just two days after the LegisHear public consultation in South Cotabato discussed the issue, during which House leaders said the removal of VAT on system loss was only awaiting the corresponding BIR issuance.

During the LegisHear press briefing, Speaker Dy said the House was working on the issue in close coordination with concerned agencies to ease the burden of electricity costs on Filipino consumers.

Senior Deputy Speaker Ferdinand “Dinand” Hernandez of the South Cotabato 2nd District said during the same briefing that Dy had been meeting with energy officials and the BIR to pursue the removal of VAT on system loss without waiting for legislation.

“So, therefore, it only takes the ERC to come up with a policy and then a revenue regulation of the BIR, which will come out anytime this September,” he said.

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Asenso Pinoy Party-list Rep. Henry “Indy” Oaminal Jr. likewise explained during the briefing that the ERC had already acted and that only the corresponding BIR issuance was needed to remove the VAT.

READ: Gatchalian: VAT on system loss can be removed without law

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The House leaders also stressed during LegisHear that the removal of VAT was separate from a broader legislative effort to address the system loss charge itself.

Hernandez noted that he and Dy had filed legislation seeking to remove system loss charges, emphasizing the distinction between the two initiatives.

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The House is currently deliberating measures seeking to amend the Electric Power Industry Reform Act (Epira) and the Anti-Electricity Pilferage Act to address system loss charges and other electricity costs passed on to consumers. /atm