| By Jess Diaz (The Philippine Star) Updated November 06, 2010 12:00 AM |
MANILA, Philippines - Two Mindanao congressmen proposed yesterday that power and water distribution companies be slapped a two-percent franchise tax instead of the present 12-percent value added tax (VAT).
In filing Bill 3513, Cagayan de Oro City Rep. Rufus Rodriguez and his brother Maximo, representative of the party-list group Abante Mindanao, said replacing the VAT with a franchise tax would translate into a reduction in the cost of electricity and water on the part of consumers.
They said VAT is a pass-on levy, while a franchise tax is absorbed by the franchisee.
They said Congress enacted the Electric Power Industry Reform Act (Epira) in 2001 to promote competition among industry players that lawmaker hoped could lead to lower rates.
“However, almost 10 years after the passage of Epira, the contrary is being experienced by the general public. There has been a constant rise in the cost of electricity. In addition, taxes imposed on industry players, which should be treated as part of the cost of doing business, are passed on to consumers,” they noted.
“This bill therefore seeks to revert to the previous system where a franchise tax is imposed instead of the VAT because the franchise tax is directly absorbed by the franchisee, and it will free the consumers from shouldering additional pass-on charges,” they added.
Bill 3513 would amend certain provisions of the National Internal Revenue Code. The proposed two-percent franchise tax would be based on gross receipts.
Several other measures seeking to bring down the cost of electricity are pending in the House of Representatives.
These include one filed by Eastern Samar Rep. Ben Evardone, which seeks to compel the Power Sector Assets and Liabilities Management Corp. (PSALM) to use the proceeds from the sale of assets of the National Power Corp. to pay for the latter’s debt so there would be no need to pass this on to taxpayers.
Apparently in reaction to Evardone’s call, the new officials of PSALM have announced that they might withdraw the power rate increase petitions the agency has filed with the Energy Regulatory Commission.
They also promised to review floating bonds or borrowing money as a way of paying for Napocor’s debt. Instead, they would use proceeds from the sale of Napocor assets or collect from the buyers.
PSALM has allowed the buyers to pay for the assets in installments, using the profits they are earning from such assets.
Meanwhile, officials of the biggest power distributor Meralco have told the House ways and means committee that they have collected more than P13 billion in system’s loss charges from their customers in Metro Manila and nearby provinces.
In the case of water concessionaire Maynilad, more than 50 percent of its daily water supply is considered system’s loss, meaning it is lost through broken pipes or is stolen through illegal connections.
This also means that “legal” customers pay for more than half of Maynilad’s water that other people are using.
In filing Bill 3513, Cagayan de Oro City Rep. Rufus Rodriguez and his brother Maximo, representative of the party-list group Abante Mindanao, said replacing the VAT with a franchise tax would translate into a reduction in the cost of electricity and water on the part of consumers.
They said VAT is a pass-on levy, while a franchise tax is absorbed by the franchisee.
They said Congress enacted the Electric Power Industry Reform Act (Epira) in 2001 to promote competition among industry players that lawmaker hoped could lead to lower rates.
“However, almost 10 years after the passage of Epira, the contrary is being experienced by the general public. There has been a constant rise in the cost of electricity. In addition, taxes imposed on industry players, which should be treated as part of the cost of doing business, are passed on to consumers,” they noted.
“This bill therefore seeks to revert to the previous system where a franchise tax is imposed instead of the VAT because the franchise tax is directly absorbed by the franchisee, and it will free the consumers from shouldering additional pass-on charges,” they added.
Bill 3513 would amend certain provisions of the National Internal Revenue Code. The proposed two-percent franchise tax would be based on gross receipts.
Several other measures seeking to bring down the cost of electricity are pending in the House of Representatives.
These include one filed by Eastern Samar Rep. Ben Evardone, which seeks to compel the Power Sector Assets and Liabilities Management Corp. (PSALM) to use the proceeds from the sale of assets of the National Power Corp. to pay for the latter’s debt so there would be no need to pass this on to taxpayers.
Apparently in reaction to Evardone’s call, the new officials of PSALM have announced that they might withdraw the power rate increase petitions the agency has filed with the Energy Regulatory Commission.
They also promised to review floating bonds or borrowing money as a way of paying for Napocor’s debt. Instead, they would use proceeds from the sale of Napocor assets or collect from the buyers.
PSALM has allowed the buyers to pay for the assets in installments, using the profits they are earning from such assets.
Meanwhile, officials of the biggest power distributor Meralco have told the House ways and means committee that they have collected more than P13 billion in system’s loss charges from their customers in Metro Manila and nearby provinces.
In the case of water concessionaire Maynilad, more than 50 percent of its daily water supply is considered system’s loss, meaning it is lost through broken pipes or is stolen through illegal connections.
This also means that “legal” customers pay for more than half of Maynilad’s water that other people are using.
No comments:
Post a Comment