De Lima says law still needed to ensure permanent removal of VAT on system loss charge

September 16, 2026

By ABOGADO.COM.PH Staff

Mamamayang Liberal party-list Rep. Leila De Lima hailed the decision of the Bureau of Internal Revenue to remove the value added tax on the allowable system loss charge in electricity bills, and pressed for the passage of the bill to make this permanent.

The removal of the VAT is expected to lead to lower power costs for consumers.

De Lima said that while the BIR’s move is welcome, a law is needed to make sure the VAT removal is clear, permanent, and would not be overturned.

She called on her colleagues to approve the bill exempting the system loss charges from VAT.

She also said the measure would require the Energy Regulatory Commission to ensure that the resulting reduction in tax liability is not passed on to consumers through any charges or pass-through mechanisms.

At the same time, she called for the passage of another bill that bars distribution utilities from imposing any cost caused by non-technical loss, whether through system loss rate or any other charge or fee.

“Filipinos deserve more. Hindi tayo dapat makuntento sa tingi-tinging kabawasan sa di-makatarungang presyo ng kuryente. Tigilan ang mga dagdag singil lalo na sa mga serbisyong hindi naman napakinabangan ng ating mga kababayan,” she said.

DAPAT LANG!

We welcome the BIR’s removal of VAT on the allowable system loss charge in electricity bills.

Pero sa kabila nitong inilabas na Memorandum Circular ng BIR, kailangan pa rin natin ng batas para gawing permanente, malinaw, at hindi basta-basta mababaligtad ang… https://t.co/Tj5PELs8Lo

— Leila de Lima (@manayleila) September 14, 2026