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IN the
wake of the controversy over the Meralco’s passing on to
consumers its system losses, including losses from
pilferage, the Federation of Philippine Industries (FPI)
may seek the court’s help in interpreting a provision in
the expanded valued-added tax (E-VAT) law that appears
to allow or mandates that VAT be collected on losses of
companies.
Jesus
Arranza, president of FPI, said system loss can be
regarded as technical or friction loss, or nontechnical
such as due to pilferage. “Thus, it is absurd to levy a
tax on losses. More so on losses due to theft.”
“There
is nothing wrong with the VAT; what I’m just saying is
that it might be wrongfully applied in system loss,” he
added.
In his
letter to Finance Secretary Margarito Teves, Arranza
said systems losses should not be passed on to
consumers; but pending the law being amended, there was
nothing they can do.
He said
they could first get their legal counsel’s opinion and
if it leans on the impropriety of imposing VAT on system
loss, they could go to the courts for a declaratory
relief—a validation of their counsel’s opinion or for a
temporary restraining order to allow them not to collect
the VAT on their systems losses that is usually passed
on to buyers.
James H.
Roldan, revenue bureau assistant commissioner for legal
services, said, “With the proposal to remove the VAT on
system loss, as proposed by some legislators; and that
under the current legal framework we are legally
constrained in doing so, we do not have the authority to
remove or to say that there should be no VAT on the
system loss portion of power bills.”
He added
the position of the Department of Finance and BIR is not
in favor of removing the VAT on the power industry. |
