A LAWMAKER is pushing to reduce the value-added tax (VAT) on electricity from 12 percent to six percent, noting that the power tax makes the country's electricity rates the third-highest in Asia. In a statement on Thursday, 1Tahanan Party-list Rep. Nathaniel Oducado said that on Dec. 22, he filed House Bill (HB) 6984, which seeks to amend the National Internal Revenue Code to reduce the VAT on electricity passed by distribution utilities, including Meralco and electric cooperatives, to the consumer. In making his point, Oducado cited an Ateneo de Manila University study that the country has the third-highest electricity rates, next to Singapore and Japan. “These factors not only cause distress among ordinary Filipinos, but they also make starting a business or investing in the Philippines costlier than it has to be,” Oducado added. Under his bill, HB 6984 will amend Sections 108 and 109 of the NIRC and would include provisions requiring mandatory pass-through of the VAT reduction to consumer electricity bills. It would also task the Energy Regulatory Commission (ERC), in coordination with the Department of Energy (DOE) and Department of Finance (DOF), to monitor compliance, issue necessary implementing rules, submit quarterly reports to Congress, and conduct a comprehensive assessment two (2) years after effectivity to determine if the full removal of the VAT is actually feasible. “A complete VAT removal would cost the government an estimated P187 billion annually, whereas a 50-percent reduction to six percent VAT would cost P93.5 billion. But to an average household consuming 200 kWh per month, the 50-percent VAT reduction would already save approximately P130 monthly or P1,560 per year,” Oducado said. Odcuado also called on his fellow lawmakers to consider the revenue that the VAT reduction would bring by making business transactions in the country less costly and more palatable to investors. He noted that business groups such as the Philippine Chamber of Commerce and Industry (PCCI) and the Philippine Exporters Confederation, Inc. have previously expressed support for legislative measures to reduce or exempt VAT on electricity sales. “Stakeholders agree that cheaper electricity would provide immediate relief to consumers, lower operating costs for businesses, attract investments, and support job creation,” Oducado further added.