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BIR confirms NGCP consistently pays 3% franchise tax to the gov’t

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The Bureau of Internal Revenue (BIR) confirmed that the National Grid Corporation of the Philippines has been religiously paying the 3-percent franchise tax as mandated by law.

This was confirmed by BIR Commissioner Atty. Romeo Lumagui Jr. during the hearing of the House Ways and Means Committee.

Lumagui also assured the public of the strict implementation of Energy Regulatory Commission Resolution No. 10 following the release of BIR Revenue Memorandum Circular 24-2024, which prohibits NGCP from passing the franchise tax to consumers.

In 2018, ERC Chairperson Monalisa Dimalanta reported that NGCP paid between ₱1.3 billion to ₱1.5 billion in franchise tax every year.

From 2016 to 2022, NGCP paid a total of ₱21 billion in franchise tax, Dimalanta added.

Meanwhile, a lawmaker has called on Congress to look into the legal accountabilities of former ERC Commissioners who approved NGCP’s petition to pass on the 3-percent franchise tax to consumers.

“What are the possible legal accountability on the part of the body who approved the resolution authorizing NGCP to pass on the 3% franchise tax,” Dagooc emphasized.

Dagooc maintained that NGCP cannot be blamed for this move, saying it acted based on the ERC resolution issued in 2011.

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

Meanwhile, Committee chairperson Albay Rep. Joey Salceda admitted that he was part of former President Gloria Arroyo’s economic team that crafted ways to make TransCo salable.

To make it attractive to investors, Salceda said they set the franchise tax gross income to 3 percent.

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