Philippines: Senators File Bills to Address Electricity Costs and Tax Burden

Senators Erwin Tulfo and Vicente “Tito” Sotto III have filed separate legislative measures addressing electricity costs and tax relief, responding to President Ferdinand “Bongbong” Marcos Jr.’s calls during his State of the Nation Address (SONA). Senator Tulfo, who chairs the Senate Committee on Energy, introduced two bills and a resolution aimed at reducing electricity charges. These measures specifically target the "system loss" charges and their corresponding Value Added Tax (VAT) that are currently passed on to consumers. System loss refers to electricity that is lost during transmission and distribution, often due to technical issues or illegal activities like electricity pilferage. Tulfo emphasized that these charges "weigh heavily on our struggling countrymen" and indicated that the committee would continue its hearings on proposed amendments to the Electric Power Industry Reform Act of 2001 (EPIRA). Meanwhile, Senator Sotto filed a bill, Senate Bill No. 2338 or the proposed "Expanded Income Tax Exemption of 2026," which seeks to raise the annual income tax exemption threshold to P350,000, effective January 1, 2027. Under this proposal, individuals earning P350,000 or less annually would be fully exempt from income tax. Sotto stated that the measure aims to "provide meaningful tax relief and allow Filipino workers to keep more of what they earn." This aligns with President Marcos's directive to increase the income tax exemption threshold to boost take-home pay and alleviate the burden on middle-class families amidst rising living costs and the lingering effects of the Middle East fuel crisis. Currently, under Republic Act No. 10963, or the TRAIN Law, individuals earning P250,000 or less annually are exempt from income tax. These legislative actions signal the government's intent to bolster economic support measures to alleviate the financial pressures faced by the populace, particularly concerning essential utilities and disposable income.