By CESAR JOLITO III

Consumer advocacy group Alliance of Concerned Consumers in Electricity and Social Services (ACCESS) has expressed strong support for the proposal to exempt electricity from the 12 percent value-added tax (VAT), saying the measure would provide much-needed relief to households and businesses amid rising living costs.

ACCESS President Wennie Sancho said the proposed VAT exemption would immediately translate into lower electricity bills, giving consumers “breathing space” at a time when many families are struggling to make ends meet.

Sancho noted that reduced power costs could help ease inflationary pressures while increasing disposable household income.

“This is a form of tax relief that will benefit ordinary consumers and help stimulate economic growth,” he said in a press statement.

“Savings from lower electricity bills can be redirected to essential expenses or small investments, while businesses can reduce production costs and improve competitiveness,” he added.

Sancho said that beyond household relief, the proposed measure could have broader economic benefits, including increased production, job generation and expanded economic activity, as lower power costs would help spur industrial and commercial growth.

However, the proposal has raised concerns within the government due to its potential impact on state revenues.

The Bureau of Internal Revenue has estimated that exempting electricity from VAT could result in a 17 percent reduction in VAT collections, potentially affecting funding for essential government services.

Executive Secretary Ralph Recto has also voiced apprehension over the possible revenue loss, particularly in relation to government debt servicing and fiscal sustainability.

Despite these concerns, ACCESS maintained that consumers deserve immediate relief given the persistently high cost of basic goods and services.

Sancho stressed that while distribution utilities are taking steps to lower electricity rates per kilowatt-hour, the national government should also contribute by easing the tax burden on power consumers.

“The government has a mandate to ensure affordable and reliable electricity,” Sancho said.

“Reducing taxes and tariffs on power is a concrete way to fulfill that obligation and help consumers cope with today’s economic challenges,” he added.

The proposed VAT exemption on electricity remains under discussion, with policymakers weighing consumer relief against potential fiscal implications./CJ, WDJ