Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
NINETEENTH CONGRESS 
First Regular Session 
House Bill No. __________ 
Introduced by  
APEC Party-List Representative Sergio C. Dagooc, 
PHILRECA Party-List Presley C. De Jesus 
EXPLANATORY NOTE 
This bill proposes to exempt the sale of electricity from the payment of value-
added tax (VAT). Prior to the enactment of Republic Act No. 9337, also known 
as the Expanded Value Added Tax Law, the cost of electricity in the Philippines 
was already one of the highest in Asia and the imposition of VAT on not only 
the generation, but also on the transmission and distribution of power further 
increased the cost.  
The Philippine Statistics Authority, based on the results of 2011 Household 
Energy Consumption Survey (HECS), has said that electricity remains as the 
most common source of energy used by household in the Philippines. About 
87 percent of 21.0 million households used electricity from March to August 
2011. This accounts for 4.800195% or more than 1/25 of all household 
expenditures in the Philippines goes towards electricity. 
The challenge is for the state to ensure affordable, reliable, and accessible 
electricity at the heart of balancing price fluctuations. This is especially true 
in view of the massive increases of fuel costs which is reflected by higher 
generation charges in our electricity bill. The effect of pricier oil products on 
our power rates will be a continuing burden to Filipino consumers until the 
global market improves. 
In view of the foregoing and in order to help alleviate the crippling burden of 
high power costs, this proposed measure seeks to exempt the sale of electric 
power from Value Added Tax. By lowering the cost of electricity, this bill hopes 
to spur additional investments, boost the competitiveness of small and 
medium enterprises through lower operating costs, and increase the 
purchasing power of a household. The amount of VAT foregone through this 
July 19, 2022
4:00 pm
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exemption will eventually be recovered by the State through the consumption 
of goods and services from this increased purchasing power. 
The passage of this bill is earnestly and sincerely sought. 
REP. SERGIO C. DAGOOC 
APEC Partylist Representative 
REP. PRESLEY C. DE JESUS 
PHILRECA Partylist Representative 


Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
NINETEENTH CONGRESS 
First Regular Session 
House Bill No. __________ 
___________________________________________________________________________ 
Introduced by  
APEC Party-List Representative Sergio C. Dagooc 
PHILRECA Party-List Presley C. De Jesus 
___________________________________________________________________________ 
AN ACT 
EXEMPTING THE SALE OF ELECTRICITY BY GENERATION, 
TRANSMISSION AND DISTRIBUTION COMPANIES AND ELECTRICITY 
COOPERATION FROM THE IMPOSITION OF VALUE ADDED TAX, 
AMENDING FOR THE PURPOSE, SECTIONS 108 (A) AND 109 (1) OF THE 
NATIONAL INTERNAL REVENUE CODE, AS AMENDED BY REPUBLIC 
ACT NO. 9337 AND 10863, AND FOR OTHER PURPOSES 
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled: 
SECTION 1. Section 108 of Republic Act No. 8424, as amended by 
1 
Republic Act No 9337 and 10963, otherwise known as the National Internal 
2 
Revenue Code of 1997, is hereby further amended to read as follows: 
3 
“Sec. 108. Value-added Tax on Sale of Services and Use or 
4 
Lease of Properties. – 
5 
(A) Rate and Base of Tax. – There shall be levied, assessed
6 
and collected, a value-added tax equivalent to twelve
7 
percent (12%) of gross receipts derived from the sale or
8 
exchange or services, including the use or lease of
9 
properties.
10 
“The phrase ‘sale or exchange of services’ means the 
11 
performance of all kinds of services in the Philippines for 
12 
others for a fee, remuneration or consideration, including 
13 
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those performed or rendered by construction and service 
14 
contractors; stock, real estate, commercial, customs and 
15 
immigration brokers; lessors of property, whether personal 
16 
or real; warehousing services; lessors or distributors of 
17 
cinematographic films; persons engaged in milling, 
18 
processing, manufacturing or repacking goods for others; 
19 
proprietors, operators or keepers of hotels, motels, 
20 
resthouses, pension houses, inns, resorts; proprietors or 
21 
operators of restaurants, refreshment parlors, cafes and 
22 
other eating places, including clubs and caterers; dealers 
23 
in securities; lending investors; transportation contractors 
24 
on their transport of goods or cargoes, including persons 
25 
who transport goods or cargoes for hire and other domestic 
26 
common carriers by land relative to their transport of goods 
27 
or cargoes; common carriers by air and sea relative to their 
28 
transport of passengers, goods or cargoes from one place 
29 
in the Philippines to another place in the Philippines; [sales 
30 
of electricity by generation companies, transmission 
31 
by any entity, and distribution companies, including 
32 
electric cooperatives;] services of franchise grantees of 
33 
[electric utilities,] telephone and telegraph, radio and 
34 
television broadcasting and all other franchise grantees 
35 
except those under Section 119 of this Code and non-life 
36 
insurance companies (except their crop insurances), 
37 
including 
surety, 
fidelity, 
indemnity 
and 
bonding 
38 
companies; and similar services regardless of whether or 
39 
not the performance thereof calls for the exercise or use of 
40 
the physical or mental faculties. The phrase ‘sale or 
41 
exchange of services’ shall likewise include:” 
42 
SECTION 2. Section 109 (1) of Republic Act No. 8424, as amended by 
43 
Republic Act No 9337, otherwise known as the National Internal Revenue 
44 
Code of 1997, is hereby further amended to read as follows: 
45 
“Sec. 109. Exempt Transactions – (1) Subject to the 
46 
provisions 
of 
Subsection 
(2) 
hereof, 
the 
following 
47 
transactions shall be exempt from the value-added tax:  
48 
x x x 
49 
(BB) Sale or lease of goods or properties or the performance 
50 
of services other than the transactions mentioned in the 
51 
preceding paragraphs, the gross annual sales and/or 
52 
receipts do not exceed the amount of Three million pesos 
53 
(P3,000,000) 
54 


(CC) Sale of electricity by generations, transmission, 
55 
and distribution companies and electric cooperatives; 
56 
and 
57 
(DD) Services of Franchise Grantees of Electric 
58 
Utilities.” 
59 
SECTION 3. Repealing Clause. - All laws, presidential decrees, 
60 
executive orders, letters of instruction, administrative rules and regulations or 
61 
parts thereof which are contrary to or inconsistent with the provisions of this 
62 
Act are hereby repealed or modified accordingly. 
63 
SECTION 4. Separability Clause. – Should any part or provision of 
64 
this Act be held unconstitutional or invalid, all other provisions hereof which 
65 
are not affected thereby shall continue to be in full force and effect.  
66 
SECTION 5. Effectivity. – This Act shall take effect after fifteen (15) 
67 
days following its complete publication in the Official Gazette or in two (2) 
68 
newspapers of general circulation whichever is earlier. 
69 
Approved, 
70