PRESIDENT Ferdinand Marcos Jr. has instructed the House of Representatives to study the removal of value-added tax (VAT) on utilities to ease the burden of Filipinos, a leader of the House of Representatives said on Thursday.
In a news conference, House Committee on Ways and Means Chairman Joey Sarte Salceda said there was an instruction last October from the President—through his intermediary secretary—to carefully study the removal of VAT on utilities.
“As soon as the relevant bills are due for discussion, we will present our findings. We are working out the committee schedule for that. PBBM gave this instruction as we have been corresponding on economic issues, and as is my usual role in the administration, I give and am sought to give my advice,” said Salceda.
“We diligently study every proposal, which may provide relief to consumers but considering the impact on government revenues,” he added.
According to Salceda, his committee will consult the Department of Finance as the Congress has already done it with Maynilad and Manila Water.
The removal of the 12-percent VAT is due to the passage of Republic Act Nos. 11600 and 11601 granting this to Maynilad and Manila Water.
“We will deal with it. We need to consult the DOF on what happened to Maynilad and Manila Water; when we removed the VAT and increased the franchise tax, hindi bumaba ang collection ng government [government collection did not go down],” he said.
“The committee will seriously study the removal of the VAT on utilities provided that we will increase the franchise tax,” he added.
The economist-lawmaker also noted that under Section 119 of the National Internal Revenue Code the franchise tax cannot be passed on to consumers.
“There is one rule: government revenues cannot decline so there will be funds for social services,” he added.
“Definitely, we try to avoid any revenue negative action. We will try as much as possible to avoid any downgrade arising from higher deficit and debts we are very conscious of that,” said Salceda.
‘Anti-VAT’
The Makabayan bloc led by House Deputy Minority leader and ACT Teachers party-list Rep. France Castro on Thursday refiled the “anti-VAT” package of bills to ease the burden of Filipino consumers reeling from the effects of the Covid pandemic and runaway inflation.
“We refiled House Bill 5994 or the bill removing value-added tax (VAT) on systems loss in electricity, House Bill 5995 removing VAT on electricity bills, House Bill 5996 removing VAT on toll fees , and House Bill 5997 removing VAT on water bills as concrete steps in alleviating the plight of Filipino consumers and lowering their bills,” said the teacher-lawmaker.
“An example is that in the case of electricity by removing the 12-percent VAT on a P2,000 electric bill of a consumer, around P240 can be saved, of the hard-earned money of consumers,” said Castro.
“These bills were first filed by Bayan Muna in the previous Congresses but we believe that the approval of these anti-VAT bills are more imperative now because of the dire hardships that Filipinos are enduring,” she added.
The bloc urged the House leadership to immediately hear these bills and added that Malacañang should also classify them as urgent as a way to help the people.
Image credits: Troi Santos