House Committee on Ways and Means Chairman Marikina City 2nd district Rep. Miro Quimbo says the chamber plans to lower the cost of electricity by imposing a one-time value added tax (VAT), on top of scrapping system loss charges as pitched by President Marcos.

Quimbo told a news conference Tuesday, July 28 that based on his discussions with House Speaker Isabela 6th district Rep. Faustino “Bojie” Dy III and Majority Leader Ilocos Norte 1st district Rep. Sandro Marcos, the aim was to levy the 12-percent VAT only on the generation side.

At present, he says VAT is imposed on three stages: generation, transmission and distribution. It is the end-user or consumer that eventually pays for the VAT impost.

“Tingnan natin kung saang areas, without reducing VAT necessarily, saan tayo puwedeng maka-reduce ng epekto nito sa ating mga kababayan,” Quimbo said.

(Let us see in which areas, without necessarily reducing VAT, we can lessen its impact on our people.)

“Ang isa diyan ay high time na rin talaga pag-aralan at itinutulak din natin na ang VAT sa kuryente ay hindi siya ipataw sa every stage ng elctricity process,” noted the economist solon.

(One of these is that it is also high time to study and push that VAT on electricity should not be imposed at every stage of the electricity process.)

Quimbo says that the VAT being imposed in each of the three processes involved in producing and distributing electricity is borne by end-users, mostly households.

“Sa bawat step na yan ay nag-impose tayo ng 12 percent, so pagdating sa dulo, sa consumer, binabayaran niya lahat yun. So ang gusto natin ay the rational way to really impose VAT [on electricity] is impose lang natin siya dun sa generation side,” he said.

(At each step we impose 12 percent, so in the end, the consumer pays for all of it. What we want is the rational way to really impose VAT on electricity, which is to impose it only on the generation side.)

He did not say what is the net effect on the end-user of paying 12 percent on three stages, from generation to distribution.

Quimbo said House leaders want a “significant effect kapag one-time VAT lang ang i-impose in the entire electricity process, dun lang sa generation side para makabawas talaga.”

(significant effect when VAT is imposed only once in the entire electricity process, solely on the generation side, so that it truly reduces costs.)

In the case of the scrapping of electricity system loss charges, President Marcos specifically mentioned this in his SONA last Monday, July 27.

It received a standing ovation from the attending lawmakers.