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Ridon to Duterte: Suspend VAT, universal charges on electricity during lockdown

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Former Presidential Commission on Urban Poor chair Terry Ridon has urged Malacañang the implementation of value-added tax (VAT) and universal charges on electricity rates until community quarantines remain in place around the country.

Ridon, lead convenor infrastructure-oriented think tank InfrawatchPH, said suspending the VAT and universal charges during the lockdown period will help reduce the economic woes of Filipino families affected by the extended enhanced community quarantine (ECQ).

“Every peso which we can add to the savings of Filipino families is already a win during this crisis. Two hundred pesos affords families an additional six kilos of rice, without the need of fresh funding from government,” he said.

Ridon, former Kabataan Party-list congressman, said suspending VAT on power rates allows low income families more savings to spend on food and basic necessities. He said President Rodrigo Duterte “has the power to stop” the VAT collection and “now is the most perfect time.”

The suspension, according to Ridon, “translates to around two hundred pesos in savings for the average household consuming 200-kilowatts per hour (kWh).”

“This translates into a staggering P4.2-billion indirect economic aid to 21 million lower income households without the need for new loans or the sale of government assets,” he added.

He said VAT on power continues to be a very contentious issue because systems losses, lifeline subsidies, and franchise taxes are levied with the said taxation.

He also said universal charges can also be suspended, particularly receivables of the Power Sector Assets and Liabilities Management Corporation (PSALM) for the National Power Corporation’s (NPC) stranded debts and contract costs.

He explained that indirect economic aid to 21 million low income households from the suspension of PSALM universal charges amounts to P207 million.

“This is an intervention which the President can order at once, without question,” Ridon added.

According to Ridon, universal charges are imposed for the recovery of NPC stranded debts and contract costs and collected from electricity consumers on a monthly basis.

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