DOE: Removing VAT to lower electricity rates but study needed

The Department of Energy (DOE) on Tuesday acknowledged that electricity rates could be lowered if the Value Added Tax (VAT) is suspended, reduced, or entirely removed.

But according to a report in “24 Oras”, the agency noted that this must first undergo a thorough review by economic managers, specifically the Department of Finance and Congress.

The DOE explained that this is to ensure that the proposal is carefully balanced with the need to maintain the continuous delivery of government services.

“...any tax measure must be carefully evaluated by the country’s economic managers… to ensure that lower electricity costs are balanced with the government’s continued delivery of essential public services,” the DOE said in a statement.

A bill has been filed in the Senate to remove the VAT on electricity — but only for those consuming 150 kilowatt-hours or less per month.

If the proposed measure is approved, consumers could see a reduction of up to P300 in their monthly bills. — Vince Angelo Ferreras/BAP, GMA News