VAT REMOVAL ON SYSTEM LOSS TO EASE POWER COSTS FOR FILIPINO CONSUMERS – SPEAKER DY

Speaker Dy said the removal of the VAT would provide direct relief by taking out a cost that should not have been added to what households and businesses pay.

“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,” said the Speaker.

“Sa pagtanggal ng VAT sa allowable system loss, mababawasan ang singil na ipinapasa sa consumers at masisiguro nating hindi sila nagbabayad ng buwis para sa kuryenteng hindi naman nila aktwal na nagamit,” he further explained.

Speaker Dy thanked President Marcos for consistently pushing government to find ways to reduce electricity costs, as well as the Bureau of Internal Revenue (BIR), Energy Regulatory Commission (ERC), and energy officials who worked with the House to address the issue.

“Salamat kay Pangulong Bongbong Marcos sa malinaw na direktiba na humanap tayo ng mga paraan upang mapababa ang presyo ng kuryente at mapagaan ang pasanin ng bawat Pilipino. We also thank the BIR, ERC, and our energy officials for responding quickly and working with Congress to turn this into actual savings for our consumers,” Speaker Dy said.

The BIR has issued Revenue Memorandum Circular No. 97-2026, removing the 12% VAT on the allowable system loss charge within the cap approved by the ERC.

The development comes just two days after the issue was discussed during the LegisHear public consultation in South Cotabato, where House leaders said the removal of VAT on system loss was already awaiting the corresponding BIR issuance.

During the LegisHear press briefing, Speaker Dy said the House was closely working on the issue together with concerned agencies to ease the burden of electricity costs on Filipino consumers.

“Malalim na usapin ang tungkol sa system loss at tinatalakay nang mabuti ng House of Representatives to make sure na itong mga gusto nating mangyari na lalong-lalo na maibsan ang kabigatan na dinadala ng ating mga kababayan,” Speaker Dy said.

Senior Deputy Speaker and South Cotabato 2nd District Rep. Ferdinand “Dinand” Hernandez said during the same briefing that Speaker Dy had been meeting with energy officials and the BIR to pursue the removal of VAT on system loss without waiting for legislation.

“Mayroon na, through the effort of the Speaker, minemeeting kami with Energy and BIR with the position na hindi na kailangan ng batas para tanggalin yung VAT doon sa system loss because when you say VAT, it’s consumption. You pay because you consume it. But since it’s system loss, there’s no consumption,” Hernandez pointed out.

“So therefore, it only takes ERC to come up with a policy and then a revenue regulation of the BIR which will come out anytime this September na tanggalin na ang VAT sa system loss,” he added.

Asenso Pinoy Party-list Rep. Henry “Indy” Oaminal Jr. likewise explained during the briefing that the ERC had already acted and that only the corresponding BIR issuance was needed to remove the VAT.

“Once malabas na po ‘yung revenue regulation ng BIR, ‘yung VAT on systems loss, isang component ng systems loss na ipapasa sa mga konsumente, matatanggal na po,” Oaminal said.

House leaders also stressed during LegisHear that the removal of VAT is separate from the broader legislative effort to address system loss charges themselves.

Hernandez noted that he and Speaker Dy have filed legislation seeking to remove system loss charges, emphasizing the distinction between the two initiatives.

“That’s why ako together with Speaker, nag-file kami ng bill to revoke system loss. We have to make a distinction. System loss, you need a law. Kaya that’s included in the bill. However, removal VAT sa system loss, you don’t need,” said Hernandez.