Business & Economy

Tax reform bill will increase electric bills - Bayan Muna

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The Senate version of the Tax Reform for Acceleration and Inclusion (TRAIN) is generally the same with the House version of the tax reform bill and is still anti-poor, a solon warned on Sunday. Dec. 3.

In a statement, Bayan Muna Rep. Carlos Isagani Zarate said that the taxreform bill, specifically the full coal tax would take its toll on the poor.

“In the power sector alone, it would cause annual power rate hikes that would hit the poor more especially with the impending tax on coal because most far flung areas and small power utilities groups (SPUGs) generally use coal and diesel to produce electricity and they would pass the additional tax completely to consumers,” Zarate said.

In the first year of the TRAIN’s implementation, Zarate, citing industry insiders in Meralco areas, said the proposed coal and excise tax increase would lead to a P14 for 200 kilowatt hour, P21 for 300 kwh energy rate.

“But in 2020 the coal tax alone would result to a P28 hike in power rates for 200 kwh, P42 for 300kwh and P56 for 400 kwh,” he added.

Based on initial computations on simulations of industry insiders and research of Bayan Muna, Zarate said the proposed higher excise tax on diesel and bunker fuel oil used in power generation will increase the cost of generation by around P1.50/kWh if the fuel consumption rate is at 0.25L/kWh.

“Of course, the increase in generation cost as a result of higher excise tax on diesel and bunker fuel oil will depend on the share of oil-fired generation to overall power plant portfolio,” he said.

The progressive lawmaker said this means that compared to the Luzon and Visayas grids, with less-than-5 percent share of power generation from oil-fired plants, price increases may be higher in Mindanao since oil accounts for around 20 percent of power generation in the grid.

“In Mindanao using the proposed excise tax on oil increase, there would be a P0.40/ kwh increase in power rates, meaning a P80 increase for 200kwh consumption, P120 for 300kwh and P160 for 400kwh,” he said.

“As we know, most of the poorest and undeveloped regions in the country are located in Mindanao and the poor people in the island would be among those hardest hit by this tax reform package,” he added. “Kailangan talagang pigilan na ang TRAIN na ito dahil puro mahirap ang kanyang sasagasaan (We need to stop the TRAIN because it will just hit the poor people in its path).” –


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