The coal tax provision of the Tax Reform for Acceleration and Inclusion bill will become a “pure pass on charge” resulting in additional P13.2-billion in electricity costs that consumers inevitably will have to bear, Senator Win Gatchalian said over the weekend.
“Despite my affirmative vote, I would like to put on record that I still maintain my reservations regarding the massive increase in the excise tax on coal that has made it into the final version of the law for the President’s signature,” he stressed.
The two chambers of Congress agreed on a compromise tax rate of P150 per metric ton on coal, divided into tranches over the next three years upon its enactment.
This means the excise tax will be P50 per metric ton in 2018, P100 in 2019, and P150 in 2020.
The original Senate version proposed a “100-200-300” graduated tax increase.
The senator, also chairman of the Senate Energy Committee, explained the negative implications of the tax hike: “The tax hike up to P150 after three years will result in an average monthly rate increase of P14.348 for a 200 kWh household served by a 100% coal contracted distribution utility.
He said this is equivalent to the price of half a kilogram of rice for 2.7 million households.
While proponents of the coal tax increase may downplay its effects as negligible, Gatchalian pointed out that Filipinos are already struggling through the pain of paying the highest power rates in Southeast Asia.
With this, Gatchalian stresses its supporters “miss the point entirely.”
The senator challenged his colleagues who like him were likewise alarmed by the looming electricity rate hikes to support the passage of future legislation that would aim to cushion the impact of the electricity hike on consumers.