Local gov’ts urged to use share in wealth tax to lower power rates | Inquirer Business

Local gov’ts urged to use share in wealth tax to lower power rates

The Department of Energy (DOE) has urged local governments receiving wealth taxes to use the funds to lower electricity rates of their constituents.

“To alleviate the plight of consumers bearing the high cost of electricity, the DOE enjoins all concerned [local governments] to prioritize the use of NWT (national wealth tax) to reduce the cost of electricity of their constituents in accordance with the relevant laws. rules and regulations,” said the advisory signed by Energy Secretary Raphael Lotilla.

The DOE issued the advisory to remind local governments that host exploration, development, utilization and exploitation of indigenous energy resources that 80 percent of the collections from the national wealth tax must be used to reduce electricity prices through subsidy and nonsubsidy schemes, subject to certain laws and regulations.Gross collection


As per the Local Government Code, local governments are entitled to an equitable share in the proceeds from the utilization and development of the national wealth within their respective areas.


The same law also said that in addition to the internal revenue allotment, local governments are entitled to 40 percent of the government’s gross collection from the preceding fiscal year from “mining taxes, royalties, forestry and fishery charges and such other taxes, fees, or charges, including related surcharges, interests, or fines and from its share in any co-production, joint venture or production sharing agreement in the utilization and development of the national wealth within their territorial jurisdiction.”

The DOE also sought the cooperation and coordination among local governments, the Department of the Interior and Local Government (DILG), the Department of Budget and Management and other concerned government and private entities “in making this mechanism work to address the high electricity costs that the consumers are currently facing.”

“The rising and volatile prices of coal and oil in the international market have greatly affected the electricity rates of the customers in several areas nationwide. particularly those being served by distribution utilities and electric cooperatives sourcing their power supply from power plants utilizing said fuels,” it added.

Further, the agency told local governments to abide by the joint circular issued by the DILG and the DOE, known as the LGU Energy Code, to maximize the benefits from hosting energy projects in their respective jurisdictions. 

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TAGS: DoE, electricity cost, LGUs, subsidy, wealth tax

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