Semirara: 3,000% hike in coal tax discriminatory, will raise power costs

Published November 29, 2017, 10:00 PM By James A. Loyola

https://business.mb.com.ph/2017/11/29/semirara-3000-hike-in-coal-tax-discriminatory-will-raise-power-costs/

Semirara Mining and Power Corporation (SMPC), a unit of DMCI Holdings, Inc., assailed the recent amendment in the government’s tax reform package as unfair for singling out coal for a 3,000 percent excise tax hike.

In an interview, SMPC Chairman Isidro Consunji also noted that, in the end, it will be the consumers and not coal mines who will shoulder the additional tax burden because this cost will be passed on to power producers who will then hike electricity rates.

“It is not us who will be affected. Because it will be passed-through (to customers/consumers),” he said.

The Senate voted to increase excise tax on coal from R10 per metric ton to R100 in 2018, R200 in 2019, and R300 in 2020 and succeeding years.

“This is unfair to coal. Because it will make natural gas and other fuels more competitive. They should impose the same tax on all fuels,” said Consunji adding that government cannot make other energy sources more competitive “by making one fuel more expensive because it is discriminatory.”

He also pointed out that the tax should not just cover coal that is mined in the Philippines but should also include imported coal.

“Again that’s (not taxing imported coal) discriminatory. That cannot be. You will be giving advantage to foreign coal and this will run counter to the incentives being given to local energy producers,” said Consunji.

He said that, if the additional tax is to be imposed, it should be on all coal used to produce energy. “Whether it’s local or foreign, they should be equal. Otherwise, those that are not slapped an additional tax will benefit,”  Consunji explained.