The Bureau of Internal Revenue’s move to remove value-added tax (VAT) on allowable system loss charges is expected to bring down electricity costs for consumers, Malacañang said.
Palace Press Officer Claire Castro said the BIR issued Memorandum Circular 97-2026 on Monday, removing VAT on allowable system loss charges up to the limit set under existing regulations.
Castro quoted BIR Commissioner Charlito Mendoza as saying the move is part of President Ferdinand Marcos Jr.’s efforts to lower electricity bills and ease the burden on Filipino consumers.
“Ang pagtanggal ng buwis sa allowable system loss ay isang hakbang upang tuparin ang hangarin ng Pangulo na maghatid ng mga reporma na direktang napapakinabangan at agarang nararamdaman ng mga Pilipino,” Castro said.
The government is expected to lose around P10 billion in annual revenues because of the policy. Castro, however, said the BIR and Department of Finance have other ways to make up for the revenue shortfall.
“Maraming paraan ang BIR, ang DOF para magkaroon ng pondo na puwedeng panagot sa mawawalang P10 billion, nandidiyan iyong tamang tax administration, paniningil ng tamang tax, mga reporma patungkol sa VAT on digital services, CREATE more,” she said.
“So lahat ng ito ay dapat na makapag-engganyo pa tayo ng investments, para mas maka-gain tayo ng maaaring tax na maipasok sa ating bansa.”
Castro said the government’s priority is to ease the burden on ordinary Filipinos rather than immediately recover the revenues that may be lost from the VAT exemption.IMT
