Congress urged: Permanently remove system loss charge

“The Bureau of Internal Revenue did its part. Congress must now do ours,” Yap said, referring to Revenue Memorandum Circular 97-2026 removing the 12 percent value-added tax on allowable system loss charge.

STAR / File

MANILA, Philippines — It’s now the turn of Congress – the Senate and the House of Representatives – to do its part in giving relief to consumers burdened by high electricity bills, by passing a law that would permanently remove the system loss charges, Rep. Arthur Yap of Murang Kuryente party-list said yesterday.

“The Bureau of Internal Revenue did its part. Congress must now do ours,” Yap said, referring to Revenue Memorandum Circular 97-2026 removing the 12 percent value-added tax on allowable system loss charge.

“Look at what this took. No new agency. No new appropriation. A few weeks from the President’s instruction to a signed circular. Commissioner Charlito Martin Mendoza found the legal basis and used it. That is the benchmark, and Congress will be measured against it,” Yap, vice chairman of the House committee on energy, noted.

In a statement, Yap expressed full belief that the House leadership under Speaker Faustino Dy III and House energy committee chairman Rep. Jose Alvarez (Palawan) is “ready to match the executive and pass the law.”

“Remove the system loss charge from consumer bills entirely – technical and non-technical losses, not just the tax on top. Energy Secretary Sharon Garin has confirmed that is what the President asked for,” Yap pointed out.

The administration lawmaker said the Department of Energy has already sent lawmakers “draft measures to repeal Section 43(F) and bills to the same end are pending in the House.”

In a statement, Dy praised the BIR for removing the VAT on system loss charge. “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,” the congressman from the sixth district of Isabela province said.

Opposition Rep. Leila de Lima also commended the BIR and called for colleagues’ support for House Bill 10677, which prohibits distribution utilities from imposing any cost caused by non-technical loss, whether through system loss or any other charge or fee.

“We welcome the BIR’s removal of VAT on the allowable system loss charge in electricity bills. Filipinos deserve more. We should not be content on the small reduction of costly power bills. They should stop collecting fees for services that have not been felt by consumers,” she said.

Meanwhile, Malacañang said the government will rely on efficient tax administration and existing tax measures to offset the revenue losses arising from the removal of the VAT on system loss charge.

“There are no discussions on the imposition of new taxes, because it’s not the concern of the government,” Palace press officer Claire Castro said at a press briefing.

“There are many ways the BIR and the DOF can raise funds to cover the P10-billion revenue loss: efficient tax administration, proper tax collection and reforms on VAT on digital service,” Castro said.

She also cited the CREATE More Act, which aims to attract more investments, as another measure to increase the government’s tax revenues. — Helen Flores