TWENTIETH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
)
25 JUL 14 All --Ol 
\
SENATE
s. No. ^36
Introduced by Senator Francis G. Escudero
AN ACT
EXEMPTING ELECTRICITY SALES FROM VALUE-ADDED TAX, FURTHER 
AMENDING FOR THE PURPOSE SECTIONS 108 AND 109 OF THE NATIONAL 
INTERNAL REVENUE CODE, AS AMENDED
EXPLANATORY NOTE
The cost of electricity consumption in the Philippines is high relative to other 
economies in the region. High operating costs fueled by high electricity prices stifle 
private sector investments in critical sectors such as manufacturing and escalate the 
prices of basic goods and commodities. It likewise curbs the efficient transformation 
of the economy and contributes to greater economic problems such as development 
progeria and premature deindustrialization.
This bill, in recognition of the wisdom behind House Bill No. 2151 filed by 
Representatives Dagooc and De Jesus and Senate Bill No. 866 filed by Senator Poe in 
the Nineteenth Congress, seeks to address the high electricity cost by exempting 
electricity sale from value-added tax. Such tax relief can lower operating costs of 
industries and businesses, temper inflation, and increase disposable household income 
while generating revenue through increased economic activity and consumption.
In view of the foregoing, due consideration and evaluation of this bill for its 
approval is requested.
FRANCIsGtxSCUDERO


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TWENTIETH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
)
25 JJL 14 /in :01
S. No.
SENATE
496
Introduced by Senator Francis G. Escudero
AN ACT
EXEMPTING ELECTRICITY SALES FROM VALUE-ADDED TAX, FURTHER 
AMENDING FOR THE PURPOSE SECTIONS 108 AND 109 OF THE NATIONAL 
INTERNAL REVENUE CODE, AS AMENDED
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled:
Section 1. Section 108 of the National Internal Revenue Code of 1997, as 
amended, is hereby further amended to read as follows:
"Sec. 108. Value-added Tax on Sale of Services and Use or Lease 
of Properties. -
"(A) Rate and Base of Tax. - There shall be levied, assessed and 
collected, a value-added tax equivalent to twelve percent (12%) of gross 
receipts derived from the sale or exchange of services, including the use 
or lease of properties.
"The phrase "sale or exchange of services" means the 
performance of all kinds of services in the Philippines for others for a 
fee, remuneration or consideration, including those performed or 
rendered by construction and service contractors; stock, real estate, 
commercial, customs and immigration brokers; lessors of property, 
whether personal or real; warehousing services; lessors or distributors 
of cinematographic films; persons engaged in milling processing, 
manufacturing or repacking goods for others; proprietors, operators or


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keepers of hotels, motels, rest houses, pension houses, inns, resorts;
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proprietors or operators of restaurants, refreshment parlors, cafes and
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other eating piaces, including clubs and caterers; dealers in securities;
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lending investors; transportation contractors on their transport of goods
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or cargoes, including persons who transport goods or cargoes for hire
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another domestic common carriers by land relative to their transport of
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goods or cargoes; common carriers by air and sea relative to their
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transport of passengers, goods or cargoes from one place in the
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Philippines to another place in the Philippines; [sales of electricity by
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gener-atien—companies, transmission—by ony moons ent4ty7—and
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distribution companies, including electric ■ cooperativesj] services of
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franchise grantees of [electric utilities,] telephone and telegraph, radio
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and television broadcasting and all other franchise grantees except
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those under section 119 of this Code, and non-life insurance companies
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(except their crop insurances), including surety, fidelity, indemnity, and
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bonding companies; and similar services regardless of whether or not
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the performance thereof calls for the exercise or use of the physical or
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mental faculties. The phrase "sale or exchange of services" shall likewise
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include:
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"x X X."
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Section 2. Section 109 of the National Internal Revenue Code of 1997, as
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amended, is hereby further amended to read as follows:
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"Sec. 109. Exempt Transactions. -
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"(1) Subject to the provisions of Subsection (2) hereof, the
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following transactions shall be exempt from the value-added tax:
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"(A) X X X.
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"X X X.
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"(BB) X X X.


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"(CC) SALE OF ELECTRICTY BY GENERATION,
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TRANSMISSION, AND DISTRIBUTION COMPANIES
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AND ELECTRIC COOPERATIVES;
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"(DD) SERVICES OF FRANCHISE GRANTEES
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OF ELECTRIC UTILITIES; AND
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"(EE) [(€G)] X X X."
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Sec. 3. Separability Clause. - If any provision or part hereof is declared
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unconstitutional, the remainder of this Act or any provision not affected thereby shall
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remain in full force and effect.
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Sec. 4. Repealing Clause. 0- All laws, acts, decrees, executive orders,
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issuances, and rules and regulations or parts thereof which are contrary to and
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inconsistent with this Act are hereby repealed, amended or modified accordingly.
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Sec. 5. Effectivity. - This Act shall take effect immediately following its
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publication in the Official Gazette or in at least two (2) newspapers of general
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circulation.
Approved,