The Energy Regulatory Commission (ERC) said consumers might be able to enjoy a lower electricity bill before Christmas, after it filed a resolution removing the value-added tax (VAT) on system loss.
In his fifth State of the Nation Address last July, President Ferdinand “Bongbong” Marcos Jr. urged the removal of system loss charges from consumer electricity bills.
However, in a “24 Oras” report by Bernadette Reyes on September 1, the ERC said that removing the VAT from the system loss charge is what they can execute immediately, as it does not require congressional amendments to existing laws.
“Hindi na kinakailangan pang hintayin ang pag-a-amyenda sa EPIRA [Electric Power Industry Reform Act] or sa batas at NIRC [National Internal Revenue Code],” ERC chairperson and chief executive officer Francis Saturnino Juan said.
“So ito ang minabuting gawin ng ERC sa pakikipag-usap din at ugnayan sa BIR [Bureau of Internal Revenue],” he added.
Systems loss refers to electricity lost during transmission and distribution, whether caused by technical issues or illegal acts such as use of “jumpers” or pilferage.
According to the ERC, the BIR must first concur with the resolution, and changes must also be implemented in the billing and collection systems of distribution utilities.
At present, the ERC said the measure has been submitted to the BIR, which holds the authority to determine how the policy will be enforced.
For some consumers, eliminating system loss entirely, rather than just removing its VAT, would provide far greater relief.
Lita Oliveros, a consumer, shared that her overdue and current electricity bills have already overlapped, making it difficult to cope despite taking strict energy-saving measures.
“Mabigat po kasi minsan naiiwan ‘yung isang bill—‘yung present,’ yung current,” Oliveros said.
To cut costs, she said they have reduced their use of the air conditioner and refrigerator.
Oliveros argued that removing the VAT on system loss gives smaller relief compared to scrapping the system loss charge itself.
Computer shop owner Olive Sambilay similarly viewed the savings from the VAT removal as minimal.
According to the ERC, the Department of Energy (DOE) and the National Electrification Administration (NEA) are still working on the mechanism to eliminate the actual system loss charge. (GMA News)
