Semirara: Higher excise tax on coal unfair to customers
A hefty excise tax on coal—a key fuel source for most power generation plants in the country—will affect consumers more, since they will have to bear the consequent rise in power costs, according to the chief of Semirara Mining and Power Corp.
In a chat with the press on Tuesday night, Semirara chair and chief executive Isidro Consunji said the increase in excise taxes on coal was “unfair” and “discriminatory.”
Shares of Semirara, an integrated coal mining and power generation firm, slid by 6.97 percent on Tuesday on news that the Senate had approved an increase in coal excise tax to P300 per metric ton over a three-year period from the current P10 per metric ton. On its first year, the proposed excise tax is P100, rising to P200 on the second year and P300 on the third year.
The excise tax on coal is part of the first package of the comprehensive tax reform program which will soon be discussed at the bicameral conference committee.
The Senate version also doubled the excise tax rates of all nonmetallic minerals and quarry resources, including copper, gold and chromite, to 4 percent.
Consunji said the impact on the company won’t be as much since higher costs would have to be passed on to consumers. At the very least, the imposition of the tax based on a staggered basis should somehow help make things easier to swallow, he said.
He added that if legislators were to impose excise taxes, it should not be on coal usage alone.
“Who’s going to benefit from this? It will benefit [gas-fired power generation plants] because they don’t have additional excise tax,” Consunji said.
“The issue now is they would like to make LNG (liquefied natural gas) more competitive. If you can’t make it more competitive, make the other fuel more expensive. That’s why it’s discriminatory,” he said.
Consunji suggested it was ironic that Semirara, now posting the highest profits and declaring the highest cash dividends in its history, would suffer a sharp drop in stock prices.
Semirara, which is part of the main-share Philippine Stock Exchange index, is currently valued by the stock market at P150.63 billion.
