Home | To bottom

APEC opposes VAT on electric cooperatives

BAGUIO CITY (Feb. 18) — The Association of Philippine Electric Cooperatives (APEC) party-list expressed opposition to the proposal pending in Congress to impose the Value Added Tax (VAT) on electric cooperatives, on the Independent Power Producers (IPPs) and on the National Power Corporation (NAPOCOR).

Apec warned that this will lead to a triple whammy of price increases for over six million households that are part of the electric cooperative franchise areas.

Apec said that VAT, as a tax on consumption, will constitute a pass-on charge to the consumers who are already affected by the ongoing price increase of petroleum products and other basic commodities.

“The imposition of a 12% VAT on electric cooperatives would mean an increase in electricity rates ranging from 50 centavos per kilowatt-hour to 84 centavos per kilowatt-hour. Residential consumers with a 100 kilowatt-hour consumption of electricity will have to pay an additional P50 to P85 monthly”, Apec said in a statement.

Imposing a VAT on IPPs and the Napocor will further compound the problems consumers face nationwide, since these charges will be passed on to electric cooperatives which in turn have no choice but to pass the burden to consumers, Apec said.

In a related development, the House Committee on Cooperatives Development chaired by Apec Representative Ernesto Pablo asked the authorities of the National Electrification Administration (SEA) and the Cooperatives Development Authority (CDA) during the committee hearing held recently to fast track the preparation of the guidelines on the registration of electric cooperatives with the CDA without converting into stock cooperatives.

Benguet Electric Cooperative, Inc. (BENECO) General Manager Gerardo Verzosa said that registration with the CDA is the only means to relieve the electric cooperatives from paying taxes imposed by the local government units. # Ed Brillantes

Home | Back to top