The Power Sector Assets and Liabilities Management Corporation (PSALM) and the Bureau of Internal Revenue (BIR) have resolved their tax dispute, which would eventually lead to the dismissal of numerous pending tax cases between the two agencies.
PSALM remitted P517,707,336.81 to the BIR, ending its long outstanding tax cases covering taxable years 2006 up to 2016 as well as the various disputed tax assessments for the taxable years 2017 and 2019. BIR amicably accepted the amount offered by PSALM.
“This global settlement of all the tax cases and disputed assessments marks a major accomplishment for PSALM as it resolves and ends many years of conflict between PSALM and the BIR,” said PSALM President and Chief Executive Officer Irene Besido-Garcia.
The deal, added Garcia, is a mutually advantageous global settlement of all the
pending tax issues between the agencies, consistent with the whole-of-government approach promoted by the administration.
“We fully recognize the advantage of following the whole-of-government approach to resolving pending issues with other government offices. We sincerely thank the BIR headed by Commissioner Caesar Dulay for being very fair to PSALM and for accepting our offer,” said the PSALM chief.
This government-to-government arrangement with the BIR ensures a clean slate for PSALM, added Garcia. Moving forward, the time and resources of both government agencies spent on protracted litigations will be saved.
PSALM utilized its unrestricted and available funds to settle the tax obligations with the BIR since all the proceeds from its privatization activities are earmarked for the payment of stranded contract costs and stranded debts absorbed from the National Power Corporation.
The remittance of PSALM will also contribute to the revenue collection efforts of the BIR, towards achieving its 2021 collection target.
Earlier, PSALM said it was expecting to save P822 million from the issuance of Executive Order No. 157 by President Rodrigo Duterte.
EO 157 authorizes the reduction of the 2021 real property tax due on property, machinery, and equipment used for the production of electricity by independent power producers covered by build-operate-transfer contracts with government-owned or controlled corporations.
PSALM said its 2021 RPT obligations amounting to about P1.019 billion at 80-percent tax assessment rate would be reduced to about P200 million at 15-percent.“With the issuance of this EO No. 157, PSALM’s 2021 RPT obligations amounting to about P1.019 billion at 80 percent assessment rate, would be reduced to about P200 million at 15 percent assessment rate,” Garcia said.