The government is poised to get a P0.70 cut in Value-Added Tax from the P4.15 per kilowatt-hour (kWh) rate hike of Meralco.
At Wednesday’s Energy Committee hearing, Meralco President Oscar Reyes bared that their hike increase basically consists of the P3.44 per kWh spike in generation charge and more or less P0.70 VAT add-on. Reyes added that the tax charge would ultimately go to the government.
Senate Majority Floor Leader Alan Peter Cayetano said who asked Reyes to repeat what he said for clarification later said: “This government has been apologizing for the rate hike, saying that they can’t do anything aside from the ERC (Energy Regulatory Commission) because it’s the private sector. But it turns out they will get P0.70,” Cayetano said.
He further reckoned that, in a way, the government prefers higher prices for petroleum since it would translate to higher tax collections.
Meralco said its hefty rate hike was due mainly to the month-long shutdown of the Malampaya natural gas platform, which accounts for 40 percent of Luzon’s electricity needs.
The absence of natural gas during the maintenance shutdown forced the power utility to use more expensive types of fuel as source of electricity. source
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