BOC and DOE Approve Coal Import Taxation

The Department of Energy (DOE) has made an agreement with the Bureau of Customs (BOC) on the tax rate to be imposed on coal being used for power generation. Instead of basing the rate on a “uniform tax rate”, the tax will be based on “transaction value”.

This is about the Newcastle Index of Australia or the Harga Batubara Acuan (HBA) index for high calorific value (CV) coal from Indonesia.

DOE Undersecretary Sharon Garin has said that “Together with the BOC, they have re-assessed and they have checked the implementation of the Customs Modernization Law, so instead of having a reference value as the law says, it should be the transactional value,”

With the agreement on the tax policy, Garin mentioned that Filipino consumers have been saved from an increase in the rates of electricity. If uniform tax rates have been followed, this would have meant an increase from ₱0.10 to ₱0.30 per kilowatt hour (kWh) in electric bills.

“As we speak, the collectors have been informed to use ‘transactional value’ if there’s no suspicious transactions. With this move of the BOC and the DOE, the advantage will be on the consumers – the prices won’t be affected, the price won’t increase because of wrongly implementing what is currently in the law,” said Garin.

Recently, the Philippine Independent Power Producers Association Inc. (PIPPA) members brought up to the BOC that the uniform tax rate being imposed on Indonesian coal imports possibly triggered power rates to go up from ₱0.10 to ₱1.70 per kWh.

Source: Manila Bulletin