BIR removes VAT on system loss charges to cut energy costs
The Philippines' Bureau of Internal Revenue has exempted system loss charges from value-added tax to help lower electricity costs for consumers. This administrative measure is part of a broader government effort to provide financial relief amid high energy prices.
Why it matters
It demonstrates a direct government intervention to mitigate the cost-of-living crisis for citizens through tax policy adjustments.
Manila Bulletin - BIR removes VAT on system loss charges to cut energy costs
BIR removes VAT on system loss charges to cut energy costs
BIR Commissioner Charlito Martin R. Mendoza
The Bureau of Internal Revenue (BIR) has exempted power loss charges from value-added tax (VAT), delivering targeted cost relief to consumers in a nation facing some of Southeast Asia’s highest electricity rates. The Bureau of Internal Revenue issued Revenue Memorandum Circular No. 97-2026, which removes the 12 percent VAT on allowable system loss charges up to the cap approved by the Energy Regulatory Commission (ERC).
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