Published January 10, 2018, 10:00 PM
By Myrna M.
Velasco
The re-imposition of 12-percent
value-added tax (VAT) on the wheeling charge of the National Grid Corporation
of the Philippines (NGCP) under the Tax Reform Acceleration and Inclusion
(TRAIN) Act will hike transmission rates by P0.072 per kilowatt-hour.
Prior to the TRAIN Law, the
transmission charge of NGCP was exempted from VAT charges – courtesy of its
franchise when it assumed the concession deal for the country’s transmission
assets in 2009. But that was removed by a specific provision under the TRAIN
Act.
“At the earliest, we expect that to
be implemented this February billing if NGCP will already be billing its load
customers in the January billing cycle,” Meralco Vice President Lawrence S.
Fernandez said.
As prescribed under Section 9 of
Republic Act 9511, or the franchise of NGCP, it was stated that “the payment by
grantee (in this case NGCP) of the concession fees due to PSALM (Power Sector
Assets and Liabilities Management Corporation) under the Concession Agreement
shall not be subject to income tax and value added tax.”
With that provision reversed, it
will hike power rates further. In the November 2017 billing of consumers, government
charges in electric bills already hover at P1.18 per kWh (inclusive of VAT
charges for other rate components) so with the calculated increases, that will
go up to more than P1.26 per kWh.
Fernandez said the higher
transmission charge will be on top of the P0.01 per kWh estimated cost impact
that the coal excise taxes as well as those on diesel taxes will have on the
electricity rates.
He qualified that such rate pass-on
will be done on staggered basis in the electric bills of Meralco customers.
“For the generators, that will
depend on their stock of coal – if they bought it new or if they still have
stocks prior to the TRAIN Law’s implementation,” he said.
Fernandez added “our
expectation will be staggered effect of the coal excise tax…on our own, we are
coordinating with our suppliers.”
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