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Thursday, January 18, 2018

DOE Discusses Tax Issues with Power Utilities



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Department of Energy Secretary Alfonso G. Cusi today said he called for a meeting with distribution utilities in order to discuss the effective and appropriate implementation of the power-related provisions of Republic Act 10963, otherwise known as the TRAIN Law. Specifically, the major items that were discussed are the adjustments due to: (a) the value-added tax (VAT) on the transmission sector; (b) the value added tax on the Cooperative Development Authority (CDA)-registered electric cooperatives; and, (c) the excise tax on coal and diesel that are used to fuel power plants.

Thereafter, another meeting was organized which included representatives from the Department of Finance (DOF), Energy Regulatory Commission (ERC), National Electrification Authority (NEA), National Power Corporation (NPC), Philippine Electricity Market Corporation (PEMC), Philippine Rural Electric Cooperatives Association, Inc. (PHILRECA), Manila Electric Company (MERALCO) and Pangasinan Electric Cooperative I (PANELCO I), which is a CDA-registered electric cooperative.

"We will look into coal contracts and scrutinize provisions as to whether there is a provision on pass-on on excise tax," Cusi said.

The Energy Chief said the meeting would also examine the submissions of coal-fired power plants to the Electric Power Industry Management Bureau.

"Corollarily, the DOE has directed all distribution utilities to require from their power suppliers the basis of any additional charges that may emanate from the Train Law. This Includes the explanation on the implementation of excise taxes vis-a-vis the minimum inventory requirement for both coal stocks and diesel stocks," Cusi pointed out.

The DOE meeting with various stakeholders aims to clarify the salient provisions of the TRAIN implementation in the energy sector and to gather feedback from them on issues and concerns they may have on the first package of the Duterte Administration's landmark tax law.

The DOE and the DOF agreed on the next steps to address the concerns of the energy stakeholders and the protection of the energy consumers.

“The ultimate objective of the Train Law of consumption-to-investment, better infrastructure and social services for the people will be achieved with this strong collaboration between the DOE and the DOF,” Cusi concluded.

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