IEMOP to withhold 2% tax on electricity spot market sales
By Francis Allan L. Angelo
MANILA — The Bureau of Internal Revenue (BIR) has required the Independent Electricity Market Operator of the Philippines (IEMOP) to properly withhold, account for, and remit the 2% creditable withholding tax on gross remittances to generation companies and other market participants.
The tax covers electricity sold through the Wholesale Electricity Spot Market (WESM).
The Wholesale Electricity Spot Market is the venue where electricity is bought and sold among generators and buyers.
The move matters because taxes on electricity transactions that are not properly withheld and remitted mean lost public revenue, and a single designated withholding agent makes those taxes easier to track and record.
Under Revenue Regulations (RR) No. 5-2026, IEMOP was formally designated as the withholding agent for gross remittances on electricity sold through WESM.
The regulation was signed by Finance Secretary Frederick D. Go, upon the recommendation of BIR Commissioner Charlito Martin R. Mendoza.
The BIR published the regulation on Oct. 1, 2026.
“We want to make sure that taxes from electricity transactions actually reach the government and are properly recorded. By placing the withholding responsibility with IEMOP, we have a clearer and more accountable system for tracking the taxes withheld and remitted from transactions in the electricity spot market,” Mendoza said.
Under the regulation, IEMOP will deduct the applicable withholding tax from gross remittances before payment to generation companies and other market participants.
IEMOP will remit the taxes withheld through the BIR’s Electronic Filing and Payment System (eFPS).
It will also issue BIR Form No. 2307 to each payee.
After each taxable quarter, IEMOP will submit the required Alphabetical List of Payees and a duly certified list of electricity buyers.
RR No. 5-2026 will take effect 15 days following its publication in the Official Gazette or on the BIR official website, whichever comes first.
The full text of RR No. 5-2026 is available at https://tinyurl.com/bdesb53h.
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