Politics · Philippines Bureau
Philippines removes VAT on power system losses to cut consumer bills
The Bureau of Internal Revenue has eliminated the 12-percent value-added tax on electricity system loss charges, a move expected to reduce power costs for Filipino households by as much as 10 percent. The tax exemption took effect immediately under a new revenue memorandum circular.
LSN Philippines ·
MANILA — The Philippines has moved to ease the burden of rising electricity costs by removing the value-added tax imposed on system loss charges in power bills, effective immediately.
The Bureau of Internal Revenue issued Revenue Memorandum Circular No. 097-2026 on Monday, eliminating the 12-percent VAT on the system loss component of electricity bills. System losses represent the power lost during transmission and distribution from power plants to consumer homes and businesses.
The Department of Energy previously estimated that removing the VAT could reduce overall power bills by 5 to 10 percent for consumers across the country. The measure represents a response to public concerns over escalating electricity costs that have strained household budgets and business operations throughout the archipelago.
System loss charges have become an increasingly significant portion of consumer electricity bills as aging infrastructure and technical inefficiencies in the power distribution network have contributed to higher transmission costs passed on to end-users.
The tax exemption applies to all electricity consumers regardless of classification, providing relief across residential, commercial, and industrial sectors.