Sayang ang tax! UP’s Victor Avecilla tells why Congress won’t scrap systems generated loss
Each month, consumers of the power distributors such as the Manila Electric Company (Meralco) continue to be charged with "systems generated loss" even if they have no hand in the losses incurred by the company in the course of selling electricity.

Sayang ang tax! UP’s Victor Avecilla tells why Congress won’t scrap systems generated loss

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Each month, consumers of the power distributors such as the Manila Electric Company (Meralco) continue to be charged with “systems generated loss” even if they have no hand in the losses incurred by the company in the course of selling electricity.

At least two bills were filed in previous Congresses seeking to scrap the charge, which covers losses such as pilfered electricity and stolen equipment due to power distributors’ failure to exercise due diligence, but not a single hearing was held on them.

University of the Philippines broadcast communication professor Victor Avecilla believes Congress is uninterested to outlaw the charge because of the billions of taxes that the government collects from it.

“Eliminate the ‘systems-generated loss’ and you eliminate the VAT (value added tax). Maybe this is the reason why the government during the past six years refused to put an end to this racket,” he said in his column published by The Standard on Jan. 31.

Avecilla called the charging of systems generated loss to consumers a “state supported extortion” racket since both the government and power distributors benefit from it.

“The consumer must pay a twelve percent tax for electricity the consumer did not use in the first place! Moreover, that’s tax paid by the consumer for the power distributor’s inefficient operations!” he said.

Avecilla said passing on losses of power distributors to consumers has allowed Meralco to be lenient in guarding their equipment and against electricity thieves.

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