THE Department of Energy (DOE) emphasized on Tuesday that any proposal to suspend, reduce, or eliminate the Value Added Tax (VAT) on electricity must carefully weigh the benefits to consumers against the government’s overall financial standing.
While such a measure could effectively lower monthly power bills and ease the financial burden on households and businesses, the department stressed that it also has broader implications that need to be thoroughly assessed before any decision is made.
In its statement, the DOE acknowledged that removing or cutting the VAT would provide direct relief to consumers, especially amid rising prices of basic commodities and services.
However, it pointed out that such a move would also mean a reduction in government revenue — funds that are essential for sustaining public services, infrastructure projects, and social programs. The department noted that any adjustment in tax policy should not compromise the state’s ability to deliver essential services to the people, as these contribute significantly to national development and welfare.
Given the complexity of the issue, the DOE recommended that all related proposals undergo in-depth review by the country’s economic managers and be subjected to thorough deliberation in Congress.
This ensures that any policy change is grounded on sound economic analysis, addresses the needs of the public, and aligns with the country’s long-term fiscal sustainability. The department’s position highlights the need for a balanced approach that seeks to provide relief without undermining the government’s capacity to serve the public.
