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Saturday, January 18, 2014

Philippine Government Faces Php 30 Billion Annual Loss if Tax on Power is Scrapped

 Internal Revenue Commissioner Kim S. Henares said yesterday that the government stands to lose more than Php 30 Billion annually if Congress decided to scrap the Value-Added Tax (VAT) on the power industry. The BIR chief made the estimate after some senators expressed their support for the move in the House of the Representatives to do away with 12% VAT to reduce the cost of electricity by about Php 1/Kwh. Henares said she was on a neutral issue, but fiscal authorities should also consider the revenue loss in the formulation of it's annual collection goal. She said the citizenry should also recognize the impact of foreign revenues in terms of constructing new schoolhouses, farm-to-market roads and other social and economic services. She said the BIR raised last year Php 30 Billion from this source and take is expected to rise this year and the following years due to increment. Henares explained the freeing power from VAT coverage can't be done through an executive order from Malacanang but only through legislation. Several senators previously opposed to the VAT law are supporting the VAT free electricity. They are Sen. Escudero, Sen. Sotto, Sen. Osmena and Sen. Trillanes. The House Committee on Ways and Means is now drafting a proposed bill changing the VAT on electricity with lower fixed rates.   
 
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