MANILA – Senator Bam Aquino is pushing for the removal of the 12-percent value-added tax (VAT) on entire electricity bills, saying a planned exemption limited to system loss charges would provide only minimal savings to consumers.

Aquino said the Bureau of Internal Revenue’s upcoming revenue memorandum circular (RMC) would reduce electricity bills by only around 0.5 to 0.8 percent if the VAT exemption covers system loss charges alone.

He said a broader exemption covering the entire electricity bill could reduce household power expenses by an estimated 8 percent to 10 percent.

For a household consuming an average of 200 kilowatt-hours (kWh) per month, Aquino estimated monthly savings of about P237 to P296, or between P2,844 and P3,552 annually.

“Sa pag-aaral po kasi namin, ang liit lang kasi ng pagtanggal ng VAT sa systems loss, parang 0.8 percent lang. Iyong mungkahi talaga namin, iyong VAT mismo sa ating electricity bill ang dapat tanggalin. Aabot po ng 10 percent discount o 10 percent na pagbaba sa electricity bill natin,” said Aquino, chairperson of the Committee on Trade, Commerce, and Entrepreneurship.

Aquino said exempting the full electricity bill from VAT would provide households with more substantial relief amid high electricity costs.

“Palagay ko, iyon ang mas hinahanap na lunas ng ating mga kababayan. Maganda naman po na mayroong ganyang panukala pero iyong mas mainam na solusyon, tanggalin iyong VAT sa buong electricity bill, hindi lang po sa systems loss,” he added.

The senator also renewed his appeal for the passage of Senate Bill No. 266, which he filed on July 8, 2025, shortly after the opening of the 20th Congress.

The measure seeks to classify the sale of electricity by generation, transmission and distribution companies, as well as electric cooperatives, as VAT-exempt transactions.

It also proposes to exempt from VAT the services provided by franchise grantees of electric utilities.

Aquino said reducing electricity costs could give Filipino households additional money for basic expenses, including food, medicine and school-related transportation and allowance.

“Kapag inalis natin ang VAT sa kuryente, mababawasan ang bayarin sa kuryente at madadagdagan ang perang magagamit ng pamilyang Pilipino para sa kanilang pang-araw-araw na pangangailangan, gaya ng pagkain, gamot, at pambaon at pamasahe ng mga estudyante,” he added.

Beyond household consumers, Aquino said the measure could also reduce operating costs for micro, small and medium enterprises (MSMEs), potentially encouraging new businesses and employment.

“Makakabawas din ito sa pasanin sa kuryente ng ating MSMEs at makatutulong na magpasok ng mga bagong negosyo sa bansa, na lilikha ng maraming trabaho at makakapagpalakas ng ating ekonomiya,” he stressed.

Aquino’s proposal forms part of his broader efforts to reduce the cost of living amid elevated prices of goods and petroleum products.

He also filed Senate Bill No. 2047, which seeks to lower the VAT rate from 12 percent to 10 percent on goods and services, including petroleum products.