Senate Deputy Majority Leader Risa Hontiveros has filed Senate Bill No. 2076, a measure seeking to exempt system loss charges from value-added tax (VAT) in a bid to ease household electricity costs.
Hontiveros argued that the current taxation scheme is flawed, as it penalizes consumers for electricity they never actually used.
System losses refer to the gap between the electricity supplied to the grid and the actual power that reaches homes.
“VAT is a consumption tax on goods and services. Systems loss charges, which represents losses in the distribution and delivery of electricity, are neither goods nor services purchased by power consumers. Hindi dapat pinapatawan ng VAT diyan ang mga pamilyang nagbabayad ng kuryente.”
She stressed that including these losses in the VAT base results in an “unfair arrangement” where Filipinos are taxed twice—first for the utility cost itself and second for the government’s share through taxes.
The proposed legislation seeks to amend the National Internal Revenue Code to exclude system loss charges from VAT coverage.
Hontiveros underscored the urgency of the measure, citing rising utility prices and the increasing cost of living.
“We must immediately end this unfair arrangement, especially now that electricity costs are going up.”
The senator said this bill is only the first step in a broader legislative push to lower power rates, noting that global economic pressures have worsened the burden on Filipino families.
“Maghahain pa tayo ng karagdagang panukalang batas sa Senado para bawasan ang pasanin ng power consumers kada buwan, at kahit papaano ay makatipid ang pamilyang Pilipino ngayong panahon ng krisis.”