Momentum is building for the removal of the 12 percent value-added tax (VAT) on electricity, with Senator Francis “Chiz” Escudero’s proposed bill that echoes the Makabayan Bloc’s long-standing push in the House of Representatives to scrap the levy seen as a heavy burden on Filipino households.
In his proposed Senate Bill No. 496, Escudero argued that removing VAT on electricity would provide immediate relief to households and industries while keeping government finances stable. He clarified that his measure is not a broad tax cut but a targeted reform in a sector where relief is most urgently needed.
“While across-the-board tax reductions may hurt government revenues, lifting VAT on electricity is a responsible move. It balances social equity with economic necessity,” Escudero said.
Under the bill, electricity sales by generation, transmission, and distribution companies, as well as electric cooperatives and franchise grantees of utilities, would be exempt from VAT.
The senator noted that electricity costs in the Philippines remain among the highest in Asia, driving up the prices of goods and services.
He urged his colleagues to hasten the deliberation of Senate Bill No. 496, which he filed last year and now pending before the Committees on Ways and Means and Energy.
Escudero stressed that his proposal should not be confused with calls to revert the expanded VAT to 10 percent. “My measure is precise and focused, not sweeping. It addresses one of the heaviest burdens on the economy while respecting fiscal realities,” he said.
The senator’s bill echoes the Makabayan Bloc’s repeated initiatives in the House of Representatives to remove VAT on electricity. The bloc has consistently argued that VAT on power is a regressive, anti-poor tax that worsens the financial burden of Filipino families. (ZIA LUNA)
