New electric bill format to reflect VAT-exempt system loss charges
In the new bill format, the allowable system loss charges are separately identified and excluded from gross sales for VAT computation.
The Energy Regulatory Commission (ERC) in the Philippines has introduced a new format for electricity bills to account for the loss charges previously exempt from value-added tax (VAT). The ERC's statement on Tuesday, September 28, specified that distribution utilities must clearly and distinctly separate these charges in the forthcoming bill format.
This resolution, Resolution No. 28, series of 2026, was ratified during a meeting held on September 16. The ERC emphasized that the new format would enable consumers to easily differentiate between charges subject to VAT and government-mandated pass-through charges that are not subject to VAT.
The rationale behind this change is rooted in recent actions taken by the Bureau of Internal Revenue (BIR), which officially removed the 12% VAT on allowable system loss charges in September. This VAT reduction was part of broader initiatives to alleviate the financial burden on electricity consumers. In addition to the revised bill format, the ERC passed Resolution No. 30, series of 2026, that aims to standardize rates for other charges that distribution utilities may collect from consumers.
These "other charges" are to be applied solely on specific, customer-requested services like connection, disconnection, and reconnection. The ERC also clarified that only direct costs such as labor, deployment, fuel, and replacement materials directly linked to the provision of these services would be included in the calculation of "other charges." Administrative costs related to these services, however, are to be excluded.
Moreover, the ERC's resolution addresses issues of late payments by stipulating that these must also be listed separately in the bill format. Distribution utilities are permitted to charge a late payment fee, capped at 2% of either the current month's bill or the unpaid amount, whichever is lower. Furthermore, utilities are mandated to issue a Notice of Disconnection to delinquent consumers.
They are given 90 days to update their billing and operational systems to reflect these changes. Finally, the ERC has directed utilities to make their charge schedules readily accessible through various channels including bulletin boards, official websites, and social media platforms.
Written by urgent.news from Philippine Star Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
