January 8, 2025 | 12:00am
MANILA, Philippines — The Bureau of Internal Revenue (BIR) has affirmed that the National Grid Corp. of the Philippines (NGCP) – a privately owned firm tasked to operate, monitor and develop the government’s power grid – has been fully compliant with its tax responsibilities.
“NGCP has been religiously paying its franchise tax to BIR,” BIR Commissioner Romeo Lumagui Jr. told the ways and means committee of the House of Representatives, which is conducting an investigation on NGCP’s supposed refund to power consumers.
Chairperson Monalisa Dimalanta of the Energy Regulatory Commission (ERC) also made a similar declaration before the committee of Albay Rep. Joey Salceda, where she said the NGCP religiously paid its three percent franchise tax, pursuant to the country’s laws.
The ERC chief noted that since 2016 to 2022, NGCP paid a total of P21 billion in franchise tax, adding that from 2018, the power company paid between P1.3 billion to P1.5 billion in franchise tax every year.
The Salceda committee was the second panel after the legislative franchise committee of Parañaque Rep. Gus Tambunting that conducted a probe on the updated “tax payments” of the NGCP after it was disallowed by the ERC in expenditures.
Salceda has been pushing for NGCP to have a refund mechanism of its “excess revenues” to consumers, even as he cited excessive profits and tax exemptions on the part of the power grid company.
On top of the Salceda committee’s agenda yesterday was a briefing of the BIR on the collection of franchise tax from NGCP, pursuant to the Implementation of BIR RMC 124-2024 “exempting NGCP franchise tax from pass-on charges.”
Rep. Sergio Dagooc of party-list Association of Philippine Electric Cooperatives, meantime, called on his House colleagues to look into the legal accountabilities of former ERC commissioners who approved NGCP’s petition to pass on the three percent franchise tax to consumers.
“What are the possible legal accountabilities on the part of the body who approved the resolution authorizing NGCP to pass on the three percent franchise tax?” Dagooc asked. “In fairness to NGCP, they did this on the basis of the ERC resolution in 2011.”
“They could not have done it without the ERC resolution, if the regulator didn’t allow it in the first place,” Dagooc stressed, arguing that NGCP cannot be blamed for this, as it acted only based on the ERC resolution issued in 2011
Dimalanta, for her part, commented on Salceda’s question that the refund on the franchise tax should be retroactive.
“We did discuss that (with) the commission, but since there was an ERC resolution that allowed it in 2011, we were unanimous in the fact of suspending it moving forward,” Dimalanta said.
This in effect meant the NGCP complied with the law.
Salceda said that since he became a congressman, “almost every law I put that pertains to regulated industries, I always make sure that anything above WACC (weighted average cost of capital) belongs to the people or belongs to the state.”
“If it’s PPP (public-private partnership), it belongs to the state, because they’re actors on behalf of the state. If it’s a franchise that deals with the consumers, then the excess revenues belong to the consumers. And there should be a process of disgorgement, of repayment,” he pointed out.
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