ERC lauded for moves to remove VAT on system loss

House Ways and Means Committee Chair and Marikina 2nd Dist. Rep. Miro Quimbo on Wednesday commended the Energy Regulatory Commission (ERC) for its move to remove the 12% value-added tax (VAT) from system loss charges.

In a statement, Quimbo said that under the ERC’s draft resolution, system loss charges would no longer be included in the taxable gross receipts of generation companies.

“I commend the ERC for this move. This is the product of sustained consultation between Congress and the Commission, and we appreciate the ERC’s initiative to act on an issue that directly affects consumers,” Quimbo said.

“This is government working together to remove costs from electricity bills wherever we can. At a time when every peso matters, even seemingly small reductions can provide meaningful relief to Filipino households and businesses,” he added.

Quimbo has also filed a measure seeking to remove the 12% VAT from system loss charges, arguing that consumers should not be taxed for electricity that never reaches them.

“We welcome this initiative because at the end of the day, the objective is simple: consumers should pay only for what they actually consume, and every legitimate opportunity to reduce the burden on their electricity bills should be pursued,” Quimbo said.

Under the ERC proposal, the VAT removal would take effect once the resolution is finalized and the Bureau of Internal Revenue confirms the corresponding tax treatment.— MCG, GMA News