Daven Tamayo

Business and labor groups back bill scrapping VAT on electricity

Electrical meters with countless electrical wires hanging near residences in Barangay Addition Hills, Mandaluyong City on February 19, 2019. George Calvelo, ABS-CBN News

Article (news)

Arthur Fuentes

ABS-CBN News

MANILA — Major Philippine business groups and one of the country’s largest labor federations on Wednesday endorsed a congressional measure seeking to remove value-added tax (VAT) on electricity sales. The business and labor groups said the proposal would ease financial pressures on households and strengthen the country’s industrial competitiveness.In a joint statement, the Philippine Chamber of Commerce and Industry (PCCI), Employers Confederation of the Philippines, Philippine Exporters Confederation and the Trade Union Congress of the Philippines (TUCP) urged lawmakers to pass House Bill 6740. The bill, authored by Deputy Speaker and TUCP party-list representative Raymond Mendoza, would exempt power sales from the 12 percent VAT.Mendoza said high electricity costs have long burdened Filipino families and weakened business productivity. “A VAT exemption on electricity will provide direct and immediate relief to the Filipino people,” he said, calling the measure both an economic reform and a form of social protection.The groups said removing VAT would help lower operating expenses for manufacturers, many of whom struggle with some of the highest power rates in Southeast Asia. PCCI president Enunina Mangio said the measure would “make the Philippines more competitive” as it seeks to attract more investors.“If we want to attract investors and grow our industrial base, we must address power costs head-on,” said Mangio.Business leaders stressed that cheaper electricity could allow factories to expand output, draw new investments and support job creation. “With more affordable power, industries can scale up, while micro, small and medium enterprises can sustain employment,” PCCI energy committee director George Barcelon said.They added that the policy would be pivotal as the country competes for energy-intensive industries such as data centres and advanced manufacturing. Lowering power costs, PCCI energy and power chairman David Chua said, would send a strong signal that the Philippines is serious about attracting high-value investments.TUCP vice president Luis Corral said the rare unity between employers and labor groups underscored the urgency of the reform, which he said could “trigger the creation of more and quality jobs” for Filipino workers.

The business and labor groups said this would ease financial pressures on households and strengthen the country’s industrial competitiveness.

The business and labor groups said this would ease financial pressures on households and strengthen the country’s industrial competitiveness.