BIR eyes new tax on Meralco bill

MANILA, Philippines – The Bureau of Internal Revenue (BIR) is mulling the imposition of a 10 percent tax on customers of the Manila Electric Co. (Meralco) for the interests they earned from their electric meter deposits, a ranking revenue official revealed during the weekend.

“There is now a draft regulation on that,” according to the source at the BIR.

The official said the move to tax Meralco consumers formed part of the BIR’s efforts to step up revenues amid heavy pressure from Malacañang and the Department of Finance to meet collection targets.

The BIR, the government’s main revenue earner, is tasked to collect P845 billion this year although its newly appointed commissioner Sixto Esquivias IV admitted that they might end 2008 with just P810 billion.

This is due to the increase in tax exemptions as mandated by the Minimum Wage Law or Republic Act 9504 that took effect last July, Esquivias said.

The BIR source said the Finance department has yet to comment on the proposal that was brought up during the term of BIR commissioner Lilian Hefti who resigned last October.

Under the proposal, Meralco would withhold the 10 percent tax and remit them to the BIR and later charge it to the consumer.

Last June, the Energy Regulatory Commission (ERC) ordered distribution utilities like Meralco to refund with interest their customers’ deposits for electric meters.

The ERC ordered Meralco and other distribution utilities to start the refund not later than six months from its effectivity or within two years in the case of non-stock and non-profit electric cooperatives.

Meralco officials said the refund is estimated to reach P2.8 billion, of which P1.5 billion comprises the principal amount and P1.3 billion as interest.

The Lopez-controlled power utility firm said it was looking at a five-year period to implement the refund.

Of the proposed five-year plan, three years will be devoted for the refund of residential customers, which now number about 1.8 million.

The ERC’s refund order was part of the implementation of the Magna Carta for Residential Electricity Consumers.

Meralco started collecting meter deposits in 1987 to ensure that customers are protected from loss or damage of the electrical meter installed in their homes.

However, the collection of meter deposits stopped in 2004, when the regulator issued the Magna Carta for Residential Electricity Consumers.

The BIR collected P55.8 billion in September, up 14 percent from P48.9 billion recorded a year ago, as indicated in the latest data from the Finance department.

This brought the January to September BIR collections to P587.9 billion or 18.9 percent below the program for the period of P606.8 billion, data further showed.

However, the nine-month collections were 12.6 percent higher than the P521.9 billion collected by the BIR in the same period last year.