Taxes on Meralco refund slashed to 15% – Finance
Credit to Author: MAYVELIN U. CARABALLO, TMT| Date: Mon, 04 Feb 2019 18:03:48 +0000
Withholding taxes on a refund due to customers of Manila Electric Co. (Meralco) have been lowered as provided by the Tax Reform for Acceleration and Inclusion (Train) law, the Finance department announced on Monday.
In a statement, the department said the tax on the refund itself — previously at 25 percent for active customers and 32 percent for those with terminated contracts — was cut to 15 percent following the signing of new revenue regulations (RR).
“These rates will be cut under the new RR approved by [Finance Secretary Carlos] Dominguez [3rd] to a flat 15 percent effective January 1, 2019 as provided under Section 17 of Train,” Finance Undersecretary Antonette Tionko was quoted as saying.
The Meralco refund was ordered by the Supreme Court almost 16 years ago and affirmed with finality on April 9, 2003. The then-Energy Regulatory Board had ruled that the utility had, since February 1994, wrongly passed on income tax payments to consumers.
Asked to comment, Meralco spokesperson Joe Zaldarriaga said the firm was continuing to “process the refund and this ruling will basically
affect the recipients of the refund.”
“It (the refund) is ongoing and we get guidance from the regulator as to the implementation of the program,” he added.
Zaldarriaga said Meralco was almost done with paying out the refund, noting the firm was now solely focused on terminated accounts.
“More than 90 percent actually naibalik na namin (We have refunded more than 90 percent),” he said.
“Ang natitira na lang yung (what is left are the) terminated accounts of some commercial and industrial customers.”
The Train law, which took effect at the start of 2018, lowered the allowable withholding tax rate to not more than 15 percent nor less than 1 percent beginning this year from 1 percent to 32 percent previously.
The new revenue regulations also lowered the 20 percent withholding tax on interest income from the refund paid to non-residential Meralco customers to 15 percent.
For other electric distribution utilities, the withholding tax on interest income from the refund paid to non-residential customers — currently at 20 percent — was also cut to 15 percent.
Interest income derived from any other debt instrument was also reduced to 15 percent from 20 percent.
On the other hand, the 10-percent withholding tax on interest income from the refund of meter deposits paid to residential and general service customers whose monthly consumption is more than 200 kilowatt per hour was retained.
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