DOE wants to assess impact of carbon tax

The Department of Energy (DOE) is exploring the possibility of assessing taxes in the energy sector to understand how they contribute to high power costs in the Philippines, according to a report by Philippine News Agency.

DOE Secretary Raphael Lotilla shared this information during a speech at the Makati Business Club in Makati City. The government needs to consider the impacts of imposing a carbon tax on power costs, he added.

Lotilla emphasized the importance of analyzing the entire taxation system in the energy sector, which includes value-added tax (VAT), excise tax, VAT on excise tax, VAT on system losses, and other elements that add to the cost of energy. He also acknowledged the need to study the proposal on carbon tax more systematically to determine its possible effects on the energy sector.

While the DOE aims to make power accessible and affordable to consumers, Lotilla recognized that these taxes also provide a significant source of revenue for the government to fund various programs, not limited to energy.

During the forum, the private sector pointed out that the Philippines needs to reduce power costs to attract more investors. Lotilla explained that, apart from being an archipelagic country, which makes power infrastructure more challenging to build, other countries in the region have subsidized power costs.

In conclusion, the DOE is exploring the taxation system in the energy sector to better understand how it affects power costs in the Philippines. Lotilla emphasized the need to study the proposal on carbon tax more systematically while acknowledging the importance of these taxes as a source of government revenue.