BIR removes VAT on allowable system loss charge

<p>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.</p><p>Under Revenue Memorandum Circular 097-2026, issued Monday, September 14, the BIR said the allowable system loss charge within the Energy Regulatory Commission-approved cap will no longer be subject to VAT, as it will be treated as a government-mandated pass-through cost.</p><p>"For consumers, the practical effect is straightforward: once the new rules become effective, VAT will no longer be imposed on the allowable system loss portion of the electricity bill," BIR Commissioner Charlito Martin Mendoza said in a statement.</p><p>"That means a lower amount will be passed on to consumers on covered billings and transactions," he added.</p><p>System loss refers to the difference between the electricity generated by power plants and the electricity consumed by and billed to end-users.…