Former Interior Secretary and senatorial aspirant Benhur Abalos Jr. is pushing for the removal of the Value Added Tax (VAT) on electricity to lower costs and attract more investments.
“The Philippines has the second highest electricity rates in Asia. For investors who want to establish manufacturing plants or car production facilities, electricity costs are a major factor in their expenses,” Abalos said.
Abalos stressed that expensive power rates ripple across various sectors, impacting water utilities, transportation costs, and ultimately, the prices of consumer goods.
“Kasi kung mataas ang kuryente, tataas ang tubig, tataas ang commodities at hindi lang yun, paano papasok ang manufacturing? Kung mataas ang kuryante mo, mataas ang overhead mo,” said Abalos.
Abalos has been consistent in his stand against VAT on electricity. During the 13th Congress, Abalos, who was then a congressman, opposed the imposition of VAT on electricity and petroleum products, arguing that it would have severe inflationary impact and only add to the financial burden of Filipino consumers.
“Ako po ay congressman noong 13th Congress noong ipinasa itong eVAT sa kuryente. Tumayo ako, hindi ako pumayag noon. Hindi ako pumayag na magkaroon ng eVAT ng buwis sa kuryente dahil tataas ang kuryente. Tinutulan ko ito,” Abalos said during the Alyansa Para sa Pagbabago’s campaign rally in Victoria, Negros Occidental on Friday.
“Tandaan nyo ito. Hanggang sa tumanda ako, gagawin ko ito. Tututulan ko ang VAT sa kuryente para bumaba ang pagbayad natin sa kuryente,” Abalos added.
After the e-VAT’s passage, Abalos immediately filed a joint resolution declaring a two-year moratorium period on the lifting of exemptions of petroleum products and generation companies from the coverage of VAT.
The Philippine Chamber of Commerce and Industry (PCCI), in 2024, also called for the removal of the value-added tax (VAT) on electricity charges, citing high power costs as a major concern for investors, Abalos noted.
While acknowledging that scrapping the VAT on electricity could lead to revenue losses, Abalos said that economic growth will compensate for it.
He stressed that sacrificing VAT on electricity will attract more manufacturing firms, generate employment, and ease the burden on Filipinos.
“If we lower or completely remove VAT on electricity, businesses will grow, and employment opportunities will expand,” Abalos explained. “What we sacrifice in tax collection from electricity, we will more than make up for through increased investments, manufacturing growth, and job creation.”
Aside from scrapping VAT on electricity, included in Abalos’ legislative agenda is to tap the country’s rich supply of renewable energy resources to further lower the electricity cost and eventually stabilize its supply.
