MANILA — The Bureau of Internal Revenue (BIR) has confirmed that the National Grid Corporation of the Philippines (NGCP) has consistently paid its mandated 3-percent franchise tax.

BIR Commissioner Atty. Romeo Lumagui Jr. made the statement during a hearing of the House Ways and Means Committee, assuring the public of the agency’s strict enforcement of Energy Regulatory Commission (ERC) Resolution No. 10. This follows the release of BIR Revenue Memorandum Circular 24-2024, which prohibits the grid operator from passing the franchise tax to consumers.

“NGCP has been religiously paying its franchise tax to BIR,” Lumagui said.

According to ERC Chairperson Monalisa Dimalanta, NGCP has been paying between P1.3 billion and P1.5 billion in franchise taxes annually since 2018. From 2016 to 2022, the total franchise tax paid by NGCP amounted to P21 billion.

APEC Party-list Calls for Probe Into ERC Approval of 3% Tax Transfer to Consumers

Meanwhile, APEC Party-list Rep. Sergio Dagooc has called for an investigation into the legal accountabilities of former ERC commissioners who approved NGCP’s 2011 petition to pass on the franchise tax to consumers.

The lawmaker also raised questions about the possible legal liabilities of officials who authorized the move.

“What are the possible legal accountabilities of the body that approved the resolution allowing NGCP to pass on the 3-percent franchise tax?” Dagooc asked.

The congressman, representing electric cooperatives, emphasized that NGCP should not be blamed for transferring the tax burden to consumers, as the company acted based on regulatory approval issued at the time.

“Hindi naman nila ipasa iyon kung wala yung resolusyon na iyon, kung hindi sila pinahintulutan ng regulator,” Dagooc said.

Salceda Admits 3% Tax Was Designed to Attract Investors

House Ways and Means Committee Chairperson and Albay Rep. Joey Salceda admitted that he was part of former President Gloria Macapagal-Arroyo’s economic team that structured the privatization of the National Transmission Corporation (TransCo).

To make TransCo more attractive to investors, Salceda explained that the franchise tax rate was set at 3 percent of gross income.

📷 NGCP