VAT-exemption on petroleum products, electricity pushed

The best piece of news to ever come out of Congress?
Jun 10, 2011

A lawmaker wants to reinstate the value-added tax (VAT) exemptions on the sale of petroleum products and electricity "to provide relief to consumers from the ill-effects of the unabated increase in oil prices."

Rep. Ma. Theresa Bonoan-David of the 4th district of Manila said the reformed VAT has made petroleum products and electricity highly-taxed commodities, which in turn translates to higher consumer prices.

"Monitoring of consumer prices shows that consumer prices are following on the heels of oil price hikes. Prices of food, beverages and tobacco, clothing, housing and repair services, and fuel, light and water all track the price of oil. The increase in electricity rates also results in the rising cost of production, rising prices and rising consumer expenditures," said Bonoan-David. "Increased collection from the reformed VAT is a gain for the government but has caused much pain to consumers since its imposition. Every peso raked in by the government is an additional burden on the consumer especially in times of rising oil prices."

Continue reading below ↓

To counter this, Bonoan-David filed House Bill 4554, which seeks to restore the VAT-exemption on petroleum products by amending a section of the National Revenue Code of 1997. The bill specifically seeks to exclude from the VAT "the sale, importation of coal and natural gas, in whatever form and state, and petroleum products (except lubricating oil, processed gas, grease, wax and petrolatum) subject to excise tax."

The bill also seeks to exempt from VAT the sales of distribution utilities related to electricity generation and distribution as well as their importation of machineries and equipment, including spare parts, which will also be used in the generation and distribution of electricity.

View other articles about:
  • Quiz Results

  • TGP Rating:

    Starts at ₱

    TGP Rating:
    Starts at ₱