DOE open to lifting VAT on electricity

Energy Secretary Sharon Garin (center) visits the Masinloc Power Plant in Zambales in this photo released by the Department of Energy (DOE) on February 4, 2026. This power plant stands as a premier energy hub, vital to sustaining the nation’s growing power needs. (Courtesy: DOE Philippines)

The Department of Energy said Tuesday it supports all proposals aimed at lowering electricity prices, including the possible reduction or elimination of the value-added tax on power.

“Our goal is clear: More affordable, stable, and reliable electricity for every Filipino,” Energy Secretary Sharon Garin said.

Garin said the DOE has been able to avoid a 7-peso-per-kilowatt-hour increase in electricity prices through the agency’s initiatives and its mandate to lower costs.

She, however, acknowledged that removing VAT on power will require further study.

“The DOE will not decide on VAT removal. It is up to the economic managers and Congress because it has a broader impact on the economy. But VAT removal is not the only solution,” she said.

“While we are studying this, we will continue to work to lower electricity costs through increased supply and faster renewable energy rollout. We will do what will truly benefit the majority of Filipinos. We will do it responsibly and for the long term,” Garin added.

The Energy department said tax measures must be carefully evaluated by economic managers, particularly the Department of Finance, as well as Congress, to ensure that lower power costs are balanced with the government’s ability to deliver essential public services.

“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,” the agency said.

The DOE added that affordability must also be pursued through sustained energy sector reforms, including efficient generation, improved grid reliability, stronger competition, and responsible energy use.

Meanwhile, at the Upper Chamber, Senator Risa Hontiveros pushed legislation aimed at removing VAT from monthly electricity bills for residential consumers using 150 kilowatt-hours or less.

She filed Senate Bill 2093, otherwise known as Kuryente Relief Act, to mitigate the impact of recent surges in utility costs on low and lower-middle-income families.

Hontiveros said this tax removal could reduce monthly electricity expenses by approximately P250 to P300 for households categorized as energy poor.

“It is only right for the government to expand its assistance from low-income to middle-income households that are often not reached by subsidy programs. Many families will be able to save if we remove the VAT from the bills of households whose electricity consumption is not that large,” she said.

The bill specifies that households meeting the 150-kWh threshold would receive the exemption automatically on their billing statements without needing to file an application.

Typical families of five in urban areas like Metro Manila often fall within this consumption range as they generally utilize only essential appliances, she said.

“Now that electricity rates are kicking upward, even middle-income families are struggling with power payments. Our tax and energy policies should be more fair and adapt to this concerning reality,” Hontiveros said.

Senator Imee Marcos, for her part, called for the amendment of the Electric Power Industry Reform Act (EPIRA), citing what she described as inflated charges imposed by Meralco.

Marcos said amending EPIRA would remove “unjust” pass-on charges and the “compounded calculation” of system loss.

“This isn’t just about following the law; it’s a matter of compassion for the people. In the middle of a crisis, it should be the big companies adjusting, not the consumers who are being bled dry by the high cost of electricity,” she said.

— Alena Mae S. Flores & Ram Superable