A Visayan lawmaker has proposed the abolition of a law (Batas Pambansa 36) which imposes an energy tax on electricity consumption of residential customers, saying that it doesn’t serve the purpose of its creation.
Rep. Wilfredo Caminero of Cebu said BP 36 was approved on Sept. 7, 1979 to conserve energy and promote its efficient utilization. Covered by the law are residential consumers with monthly power consumption of at least 650 kilowatt-hours.
During the period, Caminero said there was oil crisis and power generation and transmission were in the hands of the government through the National Power Corp.
“At that time when supply was limited, imposing an additional energy tax was a valid means to encourage energy conservation,” Caminero, member for the House majority bloc, said.
After 37 years, however, Caminero said it becomes evident that BP 36 is no longer an incentive to conserve energy and does not promote efficient utilization of electricity.
Caminero said his advocacy for the repeal of BP 36 as contained in House Bill 5883 does not mean he rejects the goal of energy conservation, which he declared must be supported and encouraged.
“But considering the fact that the Filipinos now carry the burden of paying one of the most expensive power rates in the world, the government must craft a conservation and efficiency program that incentivizes consumers instead of penalizing them and that applies to all electricity users, not only the residential consumers,” Caminero said.
For one, with the implementation of Republic Act No. 9136 or the Electric Power Industry Reform Act (Epira), the generation, transmission and distribution of electricity have been unbundled and NPC ceased to have monopoly in power generation, Caminero said.
Another thing, Caminero said, is that the demand of residential consumers has outpaced the industrial and commercial consumers.
Citing the study prepared by the National Tax Review Center, Caminero said the average energy tax collected by the Bureau of Internal Revenue from 2004-2010 generated P298.40 million, 52 percent of which was collected by the Manila Electric Co.
“NTRC stated that Meralco, the chief collector of energy tax, was of the opinion that the additional energy tax is not an effective energy conservation strategy because it only affects a very insignificant number of consumers, 3.8 percent or 162,121, of Meralco residential consumers with a total consumption of 23 percent,” Caminero said.
“With the minimum consumption of 650 kwh per month, it is reasonable to assume that the energy tax affects only on the middle and affluent sectors of the society who can presumably afford the additional charge. However, their ability to pay does not justify its continued imposition simply because the rationale for the law has ceased to exist,” Caminero added.
With the collection of 12-percent value added tax on electricity, Caminero said local franchise tax and other taxes, the government will not be placed at a disadvantaged with the scrapping of the energy tax.