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Thank You Boss! Speaker Dy Credits PBBM on System Loss VAT Removal
Consumers will still pay allowable system loss charges, but the BIR said the 12% value-added tax on that portion of power bills is removed.
- On Monday, the Bureau of Internal Revenue issued a circular excluding allowable system loss charges from the 12% VAT base, effective immediately, to provide electricity consumers relief on monthly utility bills.
- System loss represents electricity lost during transmission and distribution, which utilities recover through consumer charges; the Bureau now recognizes this as a government-mandated pass-through cost rather than gross sales, removing the VAT requirement.
- BIR Commissioner Charlito Martin Mendoza stated, "Every peso saved by consumers counts," noting the agency acted within its authority; utilities must now separately identify allowable system loss charges on all billing statements.
- While this tax exemption reduces the total bill, consumers will still pay the underlying system loss charges allowed under Energy Regulatory Commission rules, as VAT remains applicable to other components.
- President Ferdinand Marcos Jr. previously urged Congress to amend the Electric Power Industry Reform Act to prohibit utilities from passing system loss charges to consumers, though this BIR directive addresses only the VAT component.
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BIR removes VAT on system loss charge
MANILA, Philippines — The Bureau of Internal Revenue (BIR) has removed the value-added tax (VAT) on the allowable system loss charge within the cap approved by the Energy Regulatory Commission (ERC). In Memorandum Circular No. 97-2026 issued Monday, the BIR circularized ERC Resolution No. 26 and formally recognized the allowable system loss charge within the
·Makati, Philippines (the)
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BIR removes VAT on allowable system loss charge
Electricity consumers could see some relief on their power bills after the Bureau of Internal Revenue (BIR) removed the 12% value-added tax (VAT) on the allowable system loss charges imposed by power utilities on their customers.
·Quezon City, Philippines (the)
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Total News Sources11
Leaning Left5Leaning Right2Center0Last UpdatedBias Distribution71% Left
Bias Distribution
- 71% of the sources lean Left
71% Left
L 71%
R 29%
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