Catherine Talavera (The Philippine
Star) - August 27, 2018 - 12:00am
MANILA, Philippines — The second
package of the Tax Reform for Acceleration and Inclusion (TRAIN) Law may result
in higher electricity rates for consumers and impact the renewable energy
sector, according to consumer group Laban Konsyumer Inc.
In a statement, LKI president and
former trade undersecretary Victorio Dimagiba said they have warned Finance
Secretary Carlos Dominguez that power rates may rise due to TRAIN 2.
“We are monitoring the removal of
incentives in the power sector under the Train-2, particularly in the
renewable energy industry. Everything will be subjected to 12 percent
value-added tax,”Dimagiba said.
Section 15 (g) of Republic Act 9513
or the Renewable Energy Act states that “the sale of fuel or power generated
from renewable sources of energy, such as but not limited to biomass, solar,
wind, hydropower, geothermal, ocean energy and other emerging energy resources
such as fuel cells and hydrogen fuels, shall be subject to zero percent
value-added tax (VAT).”
Dimaguiba said TRAIN 2 is an
additional burden to the consumers on top of the first tax reform package.
The finance department earlier
admitted during a Senate hearing that it did not compute the indirect effect of
the TRAIN-1 Law on inflation.
Bangko Sentral ng Pilipinas Deputy
Governor Diwa Gunigundo earlier said only 0.7 percentage points or 12.2 percent
of the 5.7 July inflation rate could be attributed to the direct effect of the
tax reform law.
Non-profit think tank Ibon
Foundation said the government’s TRAIN-1 is among the biggest factors driving
the inflation rate and further inflationary surges are likely to happen in 2019
and 2020 when the next two rounds of additional taxes on oil products take
effect.
“The price increases from TRAIN are
very permanent and even if inflation rates moderate this does not mean that
prices will be lower. It is grossly deceitful for economic managers to give the
impression or claim otherwise,” Ibon said.
Advocacy group Center for Energy,
Ecology and Development (CEED) earlier said the scrapping of incentives under
the Renewable Energy Law of 2008 would further slow down the development of
clean and indigenous resources and only promote coal-based projects.
“Although it has been 10 years since
the RE Law was passed, the first subsidy under the law has only been
implemented less than four years ago. Its intended effect, which is to
kickstart RE investments, has not yet been felt,” CEED legal officer Avril de
Torres previously said.
Under the Renewable Energy Law, only
the feed-in tariff (FIT) system, the net-metering for RE end-users and
renewable portfolio standards (RPS) have only been enforced.
TRAIN 2 will call for the removal or
reduction of incentives promoting renewable energy development.
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