The Department of Energy (DOE) released a statement on 6 May assuring the public that it is closely monitoring the country’s electricity situation and coordinating with other government agencies to pursue practical, responsible, and long-term measures to make power costs more affordable.
The department emphasized that any value-added tax (VAT)-related measure must first be carefully studied to ensure that the intended savings will be fully and directly passed on to households, businesses, and other end-users.
“Under the current VAT system, electricity is subject to a pass-through tax structure where companies along the power supply chain — from generation to distribution — offset the VAT they pay on inputs against the VAT they collect from consumers,” the DOE said.
The agency explained that removing or adjusting VAT on electricity would require a thorough evaluation of how the changes would affect the entire supply chain, as well as how much savings consumers would actually receive.
“The DOE stands ready to provide technical inputs to economic managers and Congress to help ensure that any policy intervention will result in genuine consumer benefit while protecting the continued delivery of essential public services,” the department added, noting that it continues to advance measures addressing electricity prices.
The DOE also said it helped avert a potential P7-per-kilowatt-hour increase in electricity prices to provide relief to consumers amid the ongoing Middle East petroleum crisis.
The department added that it will continue working with Congress, economic managers, regulators, industry players, and consumer groups to ensure sustainable and inclusive benefits for the Filipino people.