Tax break in exchange for surcharge fee?

The House leadership plans to offer a tax break to consumers in view of the impending implementation of a fuel surcharge fee.

House leadership spokesman Charles Reyes Jr. said that Vice Speaker Timothy Villagomez, chair of the House Committee on Public Utilities, Transportation, and Communications, is poised to introduce a bill providing for the tax break.

“It’s giving consumers and commercial businesses a tax break in view of the higher fuel cost. This is only temporary,” said Reyes.

He said, though, that Villagomez is still debating whether to go ahead with that, or stick to his other proposal, a bill that provides for a government subsidy for the Commonwealth Utilities Corp.

“He will decide which of the two proposals he’d introduce Wednesday. The vice speaker is very wary of increasing the cost for consumers so alternative solutions must be made to mitigate the impact of higher utility rates,” he said.

In an earlier interview, Villagomez said that CUC officials had suggested the need for some tax relief to help people cope with the rising electricity costs.

CUC officials have been going back and forth the Legislature and the Executive to discuss FSF.

CUC plans to impose a fuel surcharge fee of at least 3.5 cents per kilowatt hour across the board beginning early next month in view of fuel price increases worldwide.

Villagomez, however, is proposing that the 3.5 cents be broken up, with the government shouldering 2.5 cents in direct subsidy, 1 cent for commercial users, and zero for residential users. He said this would safeguard households, especially those in the low-income category.

Lt. Gov. Diego T. Benavente, on the other hand, favors a 1-cent subsidy from the government and 2.5 cents for commercial and residential users. He said this would mean a $150,000 monthly subsidy from the government for up to four months or until the price of oil stabilizes.

For his part, Gov. Juan N. Babauta, who just arrived from a trip to Washington D.C., said yesterday that he stands by Benavente’s position.

“Whatever the lieutenant governor said, that’s our position,” he said.

When asked if he would be willing to reprogram money to help CUC, he said, “We’ll work closely with CUC to address this [FSF].”

Villagomez earlier advised CUC to run to the Executive Branch to get emergency funds so it could avoid implementing the FSF by next month.

“The governor has a reprogramming authority. What would prevent CUC from doing it [implementing the FSF] is for them to get new cash. Where do you ask for it other than the government in the form of subsidy? I favor this than burden the people,” he said.