A former lawmaker on Wednesday pointed out that no law was needed to stop power firms from putting the value-added tax (VAT) in the system loss charge in consumers’ bills,
According to Tina Panganiban-Perez's report on "24 Oras," House members in a hearing on system loss asked the Bureau of Internal Revenue (BIR) for the basis of charging consumers the VAT for electricity they did not technically consume.
“Our legal basis for this is Section 105 of the National Internal Revenue Code, which states that, general rule po, any person who sells or renders services is subject to VAT,” said BIR representative John Kenneth Estrella in a mix of English and Filipino.
“Does that include system loss? No, Mr. Chair. you cannot sell system loss,” Colmenares said.
“There is no law that specifically imposes Technical System Loss and VAT on system loss,” he added.
Meanwhile, Energy Regulatory Commission (ERC) Chair Francis Saturnina Juan cited the Republic Act 7832 or the Anti-Electricity and Electric Transmission Lines/Materials Pilferage Act of 1994 as the basis of the current system on system loss. The said law was later revised by the Electric Power Industry Reform Act (EPIRA).
However, Colmenares pointed out that no new law was needed to amend the law that Juan mentioned, as it stated that nothing in it prohibited the ERC from reducing or phasing out the system loss.
“Nothing in this act shall impair the authority of the ERC to reduce or phase out technical or design losses as a component of system loss. So ERC has the power,” Colmenares said, quoting the EPIRA.
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–Jean Mangalum/NB GMA News