Wednesday, January 10, 2018

Power consumers to feel brunt of coal-tax increase under TRAIN, group says



By Jonathan L. Mayuga-

The increase in imported coal tax under the Tax Reform for Acceleration and Inclusion (TRAIN) Act will not be felt by power producers, but by  power consumers, the group Advocates of Science and Technology for the People (Agham) warned on Tuesday.
In a news statement, Finesa Cosico, secretary-general of Agham, said electricity consumers are at the losing end of the deal with the imposition of the increased coal tax under the tax-reform package offered under TRAIN.
“They [electricity consumers] will be burdened with higher electricity rates despite standing to gain no real benefit from the supposed environmental regulation,” she added.
Cosico added that, under the government’s tax-reform program, the coal tax will increase from the current P10 per metric ton in a 50-100-150 hike scheme for three years, with the P50 increase slated this year.
Quoting the Department of Energy (DOE), she said the coal tax, an excise tax, is classified as a pass-on charge to consumers under the Electric Power Industry Reform Act (Epira), the law that liberalized the country’s energy industry.
“As a pass-on charge, the coal tax will put the entire burden of rising power costs on consumers instead of taxing big-time coal businesses. As such, it will not inhibit the increase of coal-fired power plants,” she said.
She also debunked the proponents’ assertion that the coal tax is a step toward meeting the country’s carbon-emission limits, saying pollution will remain at business-as-usual, notwitstanding with its full implementation.
“The coal tax does not change the fact that coal is still a cheap but [a] dirty energy resource. It also does not change the Duterte [administration’s] framework of using coal as the primary source in the country’s energy mix,” Cosico said.
The group is demanding the reorientation of the coal tax as a charge to be carried by corporations and called for the repeal of the Epira, which, it said, has allowed the phenomenon of such pass-on provision.
“We also call for the redistribution of the energy mix away from the ‘pollutive coal’ to the indigenous energy resources abundant in the country,” Cosico said.
An activist group earlier criticized government officials for insisting that the new tax imposition under TRAIN will have minimal and temporary effects on the prices of commodities and will benefit the rich and poor alike.
The Samahan ng Progresibong Kabataan (Spark) branded as  “malicious and deceptive” the statements issued by Secretary Ramon M. Lopez of the trade department and Presidential Spokesman Harry L. Roque Jr. against those who oppose the new tax package.
The group said the two officials are the ones spreading misinformation by downplaying the adverse effects of TRAIN and by making it seem “justified and impartial.”
“They must admit that TRAIN, like all indirect taxes, are pass-on impositions. Manufacturers of goods and service providers shall simply make their clients bear their tax obligations,” Spark contented.
The youth activists challenged both Lopez and Roque “to live even for a day on minimum wage so they may know firsthand what more than 12 million Filipinos will suffer once TRAIN is fully in motion.”

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