Consumer group CitizenWatch Philippines said over the weekend the government should reconsider tax policies on fuel for power generation that add to consumers’ financial strain as inflation continues to surge and the cost of living spirals.
CitizenWatch co-convenor Christopher Belmonte said the oppressive impact of value added tax (VAT) and excise tax on all fuels used for generating electricity should be re-evaluated.
The group said consumers nationwide are feeling the pinch of rising prices and household budgets are stretched thin as families strive to make ends meet amid rising costs of food, housing and transportation. The high cost of energy affects every aspect of daily life.
It said power for homes and businesses, commuting to work and transportation of goods have become significantly more expensive, exacerbating inflationary pressures.
“Taxes on power and energy amplifies this burden. Removing the VAT and excise taxes would provide much-needed relief to households and the small and medium enterprises [SMEs] struggling with inflation,” it said.
“Furthermore, VAT on power and energy drives up production costs for businesses, often passed on to consumers as higher prices for goods and services. This further fuels inflation and hampers economic growth by reducing disposable income for consumer spending,” CitizenWatch said.
The group said low-income families and vulnerable populations are disproportionately affected by high energy costs.
“Rationalizing the taxes on fuels used for energy generation would help alleviate some of this burden and help all low-income consumers afford basic needs,” it said.
“We call on the President and our policy leaders to prioritize the ordinary Filipino consumer’s well-being and adopt a pragmatic and compassionate tax policy that, beyond providing cross-sectoral economic relief, can become the impetus for more investment to pump up the economy,” CitizenWatch said.
