I laud Energy Regulatory Commission (ERC) chairman Agnes Devanadera for her advice to the next administration that the value-added tax (VAT) be removed on power generation and maintained only for power distribution.
Her clear solution for lowering electricity costs is long overdue and echoes one of my proposals in Senate Bill 219, filed during my first month as senator in July 2019, which seeks to exempt not only the sale of electricity from VAT but also the sale or importation of machines and equipment to be directly used in the generation, transmission, and distribution of electricity.
Removing the VAT on electricity charges will not only benefit household and commercial end-users. It will also make the Philippines more attractive to foreign investors who balk at the country’s high power rates, arguably the highest in Asia.
We need to mitigate the inevitable increase in the cost of power generation dependent on oil and gas, as global prices and supply of these commodities will continue to be volatile due to the Russia-Ukraine war.
The transition teams of both the present government and presumptive president-elect Ferdinand Marcos Jr. should seriously consider ERC chairman Agnes Devanadera as the next chief of the Department of Energy.
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