Senator Francis Tolentino has filed a bill seeking to exempt electricity and internet services from the 12 percent value-added tax (VAT).
In filing Senate Bill 2970 on Thursday, Jan. 30, Tolentino noted that electricity costs in the Philippines are among the highest in the region – a situation that may stifle economic growth and even cause deindustrialization.
On the other hand, he said exempting internet services from VAT will help promote digital inclusion, ensuring that all Filipinos can participate in the digital economy.
"The important role of electricity and internet in our daily lives, particularly in education and remote work cannot be overstated. As more educational institutions transition to online platforms and businesses adopt flexible work arrangements, affordable internet access becomes even more vital," Tolentino said in his bill.
"By eliminating VAT on electricity and internet sales and services, the government would alleviate financial pressures on consumers and businesses alike, fostering a more inclusive and robust digital landscape," he added.
Tolentino's bill aims to amend Section 108 of the National Internal Revenue Code of 1997, removing electricity sales by generation and services of electric utilities from VAT.
It expressly exempts from VAT the sale of electricity by generation, transmission, and distribution companies and electric cooperatives; services of franchise grantees of electric utilities; and sales and services of internet service providers (ISPs).
"This bill aims to alleviate the rising costs of essential commodities and improve the overall quality of life for Filipinos," he added.