Malacañang urged to suspend VAT, UCs to cut power rates

To ease the financial pain of the Filipinos during the lockdown period, Malacañang is being urged to suspend the value added tax (VAT) and universal charge (UC) components in the electricity rates so the power bills of consumers can be substantially pared by roughly ₱1.00 per kilowatt hour.

Advocacy group Infrawatch PH Convenor Terry Ridon said the suspension of these charges could help alleviate the economic woes of Filipino families, especially those that have been detrimentally affected during by the one-and-ahalf months enhanced community quarantine (ECQ) in Luzon.

“The suspension of VAT and universal charges on electricity rates during the coronavirus crisis translates to around ₱200 in savings for the average household consuming 200-kilowatt hours,” Ridon said. Essentially, that is equivalent to ₱1.00 per kWh savings.

On aggregate, he said this will translate to “staggering ₱4.2 billion indirect economic aid to 21 million lower income households without the need for new loans or the sale of government assets.”

On the proposed scrapping of the UCs in the power bills, Ridon said this could come as additional ₱207 million worth of financial relief for the marginalized power end-users.

UC collections are remitted to state-run Power Sector Assets and Liabilities Management Corporation (PSALM), hence, Ridon noted that President Rodrigo Duterte can easily intervene and order stoppage of the pass-on of universal charges in the bills.

“Together with the Energy Regulatory Commission (ERC), PSALM can certainly make this heroic contribution to the country’s coronavirus effort by suspending collection until the worst is over,” Ridon said.

Further, if the VAT in the power bills would temporarily be ditched, the former lawmaker noted this will give “low income families more savings to spend on food and basic necessities.”

He stated “every peso which we can add to the savings of Filipino families is already a win during this crisis,” adding that with the additional ₱200 shoring up their pockets, this would enable them to buy six kilos of rice, even without the need for financial help from the government.