Senator Risa Hontiveros on Monday filed a measure seeking to remove the value-added tax (VAT) imposed on systems loss charges currently reflected in monthly electricity bills.

Following the filing of Senate Bill No. 2076, Hontiveros said Filipino consumers should no longer bear what she described as a “double burden” of paying VAT on top of the “already absurd” systems loss charges passed on by power utilities.

“Itong VAT sa systems loss ay dobleng pasakit at insulto: Pinagbabayad na nga tayo ng systems loss na hindi natin napakinabangan, tapos pagbabayarin pa tayo ng buwis dito. We must immediately end this unfair arrangement, especially now that electricity costs are going up,” Hontiveros said.

The senator explained that the proposed measure seeks to amend the National Internal Revenue Code (NIRC) by excluding systems loss charges from transactions subject to VAT. Under the bill, systems loss refers to “the difference between the electrical energy delivered to the distribution system (energy input) and the energy delivered to the residential household consumers (energy output).”

“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,” Hontiveros said.

“By removing the VAT on systems loss charges, we are not just making our tax policies more fair and just - we are also providing immediate relief to consumers facing higher electricity bills this summer season,” she added.

Hontiveros said the proposal forms part of a broader set of legislative measures she plans to introduce to assist electricity consumers, particularly low-income households, amid rising costs of basic goods linked to the ongoing Middle East conflict.

“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," Hontiveros concluded.