MANILA — The Department of Energy (DOE) said proposals to suspend, reduce, or remove the value-added tax (VAT) on electricity should be carefully assessed to balance consumer relief with the government’s fiscal capacity.

In a statement, the DOE said that while lowering or removing VAT could help ease electricity costs, the move must be evaluated in relation to the “government’s continued delivery of essential public services.”

The agency added that such proposals should be reviewed by the country’s economic managers and Congress.

“The Department stands ready to provide technical inputs on the energy-sector impact of any proposed measure, in support of a whole-of-government approach that protects both consumer welfare and fiscal sustainability,” it said.

The DOE also stressed that improving electricity affordability should go beyond tax measures and include long-term reforms in the energy sector, such as enhancing generation efficiency, improving grid reliability, strengthening competition, and promoting responsible energy use.

“These proposals must be weighed alongside long-term measures that ensure stable, sustainable, and affordable power for consumers,” it added.

Calls to reduce or remove VAT on electricity have gained traction anew amid oil supply concerns linked to the ongoing Middle East crisis.

Meanwhile, a Senate measure has been filed seeking targeted relief for low-consuming households.

Senator Risa Hontiveros on Tuesday filed Senate Bill No. 2093, or the “Kuryente Relief Act,” which proposes to exempt households consuming 150 kilowatt-hours (kWh) or less per month from paying VAT on electricity.

The measure aims to reduce monthly electricity bills of “energy-poor” consumers by around PHP250 to PHP300.

“Dapat lang na palawakin ng pamahalaan ang tulong nito mula low income hanggang middle income households na kadalasan ay di naabot ng subsidy programs. Makakatipid ang maraming pamilya kung tatanggalin natin ang VAT sa bill ng mga kabahayang di naman kalakihan ang gamit sa kuryente (The government should expand its assistance from low- to middle-income households that are often not covered by subsidy programs. Many families will save if we remove VAT on the electricity bills of households with modest consumption),” Hontiveros said.

The bill provides for automatic VAT exemption for qualified households and is intended to complement existing lifeline rate programs by expanding support to a broader segment of consumers.