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Republic of the Philippines
House of Representatives
Quezon City Metro Manila

SEVENTEENTH CONGRESS
First Regular Session

REGISTRATION UNIT
BILLS AND INDEX SERVICE

House Bill 210

Introduced by REP. ENRICO A. PINEDA and REP. MICHAEL ODYLON L. ROMERO

EXPLANATORY NOTE

Electricity has become a crucial commodity in this day. In fact, electricity accounted for
4.5% of total family expenditure in 2012.' For a family of five in the lowest income decile,
this is equivalent to spending Php 7,023 or Php 585 a month.”

Although fully subsidizing electricity rates is not feasible due to budgetary constraints, the
State still has the mandate to keep electricity prices as affordable as possible.

The removal of the Value Added Tax (VAT) on electricity generation, transmission and
distribution offers some relief.

The removal of the VAT is projected to reduce electricity rates among residential consumers
by 0.7918 Php/KwH- equivalent to savings of Php 19 a day or Php 6,936 a year.

If the repeal of VAT on energy use will be instituted, it will trigger a ripple effect of
lowering the cost of goods and services whose production rely on the use of power .

In short, it will benefit consumers, as it would free a large section of the budget for basic
commodities like food . Liberating power from VAT will bring down the prices of a wide
range of goods in one stroke.

In view of the foregoing, approval of this measure is eagerly sought.

ODYLON L. ROMERO
tative, 1PACMAN Partylist

‘Philippine Statistics Authority.2012 Family Income and Expenditure Survey.

Abid.

“united States Agency for International Development. “Challenges in Pricing Electric Power Services in Selected
ASEAN Countries” (April 2013). Retrieved from http://www. catif.or/wp-
content/uploads/2013/10/Challenges-in-Pricing-Electric-Power-Services.pdf


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Republic of the Philippines
House of Representatives
Quezon City Metro Manila

SEVENTEENTH CONGRESS
First Regular Session

House Bill “194

Introduced by REP. ENRICO A. PINEDA and REP. MICHAEL ODYLON L. ROMERO

AN ACT
EXEMPTING THE SALE OF ELECTRICITY BY GENERATION TRANSMISSION
AND DISTRIBUTION COMPANIES AND ELECTRICITY COOPERATIVES,
AMENDING FOR THE PURPOSE, SECTIONS 108 (A) AND 109 (1) OF THE
NATIONAL INTERNAL REVENUE CODE, AS AMENDED BY REPUBLIC ACT
NO. 9337, AND FOR OTHER PURPOSES

Be it enacted by the House of Representatives and the Senate of the Philippines in Congress
assembled:

SECTION 1.- Section 108 (a) of the National Internal Revenue Code, as amended by
Republic Act No. 9337, 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.- x xx

i) XXX

(ii) xxx

“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 keepers of hotels, motels, rest houses, pension houses, inns,
resorts; proprietors or operators of restaurants, refreshment parlors, cafes and
other eating places, including clubs and caterers; dealers in securities; lending
investors; transportation contractors on their transport of goods or cargoes,
including persons who transport goods or cargoes for hire another domestic
common carriers by land relative to their transport of goods or cargoes;
common carriers by air and sea relative to their transport of passengers, goods
or cargoes from one place in the Philippines to another place in the
Philippines; [sales of electricity by generation companies, transmission, and

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distribution companies;] services of franchise grantees of [electric utilities,]
telephone and telegraph, radio and television broadcasting and all other
franchise grantees except those under section 119 of this Code, and non-life
insurance companies (except their crop insurances), including surety, fidelity,
indemnity, and bonding companies; and similar services regardless of whether
or not the performance thereof calls for the exercise or use of the physical or
mental faculties. The phrase ‘sale or exchange of services’ shall likewise
include:

“x Xx,

SECTION 2.- Section 109 (1) of the National Internal Revenue Code, as amended by
Republic Act No. 9337, is further amended to read as follows:

EC. 109. Exempt Transactions-

(1) Subject to the provisions of Subsection (2) hereof, the following transactions shall
be exempt from the value-added tax.

(A) x xx
(B) xxx
“XXX,

(W) xxx

(X) SALES OF ELECTRICITY BY GENERATION, TRANSMISSION,
AND DISTRIBUTION COMPANIES AND ELECTRIC COOPERATIVES;

(Y) SERVICES OF FRANCHISE GRANTEES OR ELECTRIC UTILITIES.
SECTION 3. Repealing Clause.-All laws, decrees, orders, rules and regulations or

other issuances or parts thereof inconsistent with the provisions of this Act are hereby
repealed and modified accordingly.

SECTION 4.Separability Clause.-If any provision of this Act is subsequently
declared unconstitutional, the validity of the remaining provisions hereof shall remain in full
force and effect.

SECTION 5. Effectivity Clause.-This Act shall take effect immediately after its
complete publication either in the Official Gazette or in a newspaper of general circulation in
the Philippines.

Approved,