Bernie Anabo Jr.
MANILA, Philippines — The Bureau of Internal Revenue (BIR) is tightening the screws on tax accountability in the electricity spot market, with Commissioner Atty. Charlito Martin R. Mendoza moving to ensure that taxes arising from electricity transactions are properly withheld, documented, and remitted to government coffers.
Under the new Revenue Regulations (RR) No. 5-2026, the Independent Electricity Market Operator of the Philippines (IEMOP) is formally designated as the withholding agent for the 2% creditable withholding tax on gross remittances to generation companies and other market participants for electricity sold through the Wholesale Electricity Spot Market (WESM).
The message is clear: electricity market transactions must carry their proper tax obligations, and every peso withheld must be accounted for and remitted to the government.
The regulation, signed by Finance Secretary Frederick D. Go upon the recommendation of Mendoza and published by the BIR on October 1, 2026, strengthens the government’s ability to track tax compliance in the country’s electricity spot market.
MENDOZA TIGHTENS THE TAX NET!
Under Mendoza’s leadership, the BIR is sharpening its enforcement mechanisms by placing withholding responsibility directly on IEMOP, establishing a clearer chain of accountability for taxes arising from electricity sales.
“We want to make sure that taxes from electricity transactions actually reach the government and are properly recorded,” Mendoza said, underscoring the importance of transparency and accurate tax remittance.
By assigning IEMOP the role of withholding agent, the government seeks to strengthen tax monitoring and reduce gaps in the recording and remittance of taxes connected with wholesale electricity transactions.
NO MORE GUESSWORK IN TAX REMITTANCES!
The new rules spell out IEMOP’s obligations. The market operator must deduct the applicable 2% withholding tax from gross remittances before paying generation companies and other market participants.
IEMOP must also remit the withheld taxes through the BIR’s Electronic Filing and Payment System (eFPS), issue BIR Form No. 2307 to every payee, submit the required Alphabetical List of Payees, and provide a duly certified list of electricity buyers after each taxable quarter.
These requirements establish a more systematic paper trail, giving the BIR stronger documentation for monitoring compliance and checking whether the taxes associated with electricity market transactions are properly reported.
For Mendoza, stronger tax administration means more than collecting money. It means building a system where tax obligations are clearly assigned, transactions are properly documented, and remittances can be verified.
GOVERNMENT REVENUES IN THE SPOTLIGHT!
The issuance of RR No. 5-2026 reinforces the BIR’s broader drive to improve tax compliance and strengthen revenue administration.
With electricity playing a vital role in the national economy, the regulation puts tax accountability in the wholesale power market under sharper scrutiny. By formalizing IEMOP’s withholding duties, the BIR aims to make the process more transparent, traceable, and accountable.
The regulation will take effect 15 days after its publication in the Official Gazette or on the BIR’s official website, whichever comes first.
Under Mendoza’s watch, the message to the electricity market is unmistakable: tax compliance is not optional, withholding obligations must be fulfilled, and government revenues must be properly accounted for.
