Benise Balaoing

First Gen Corp. inaugurates new natural gas plants in Batangas. ABS-CBN News

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ABS-CBN News

MANILA -- The Bureau of Internal Revenue (BIR) has exempted indigenous natural gas and related power generation transactions from value-added tax (VAT).The Department of Finance and the BIR issued new regulations implementing the Philippine Natural Gas Industry Development Act (RA 12120). The measure removes the 12-percent VAT on the sale and purchase of locally sourced gas, as well as the electricity generated from it.Under the rules, the tax break covers suppliers, aggregators, and power plants, provided their operations are certified by the Department of Energy (DOE). For blended gas supplies, the exemption applies strictly to the portion derived from indigenous sources to ensure the incentives remain &quot;properly targeted.&quot;To qualify, participants must present an endorsement from the Department of Energy’s Oil Industry Management Bureau and a certification indicating the volume and percentage of indigenous natural gas sold during the taxable quarter. Generation facilities, meanwhile, must get a certification from DOE’s Electric Power Industry Management Bureau confirming their use of indigenous natural gas and the amount of electricity produced from such gas. Participants and generation facilities must attach their DOE permit to the endorsement documents. BIR Commissioner Charlito Mendoza noted that natural gas can lower energy costs and help achieve national energy security.“By establishing transparent and well-defined processes for VAT incentives on indigenous natural gas, we strengthen both the competitiveness of cleaner energy sources and the integrity of our tax system,” he said.<div><a href="https://www.abs-cbn.com/news/business/2026/1/19/-historic-malampaya-gas-find-could-help-lower-power-costs-doe-0941" rel="noopener noreferrer" target="_blank">&#x27;Historic&#x27;: Malampaya gas find could help lower power costs - DOE</a></div>

The BIR has exempted indigenous natural gas and related power generation transactions from VAT.

The BIR has exempted indigenous natural gas and related power generation transactions from VAT.

BIR exempts indigenous natural gas transactions from VAT

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BIR exempts indigenous natural gas transactions from VAT

Benise Balaoing,

ABS-CBN News

Published March 23, 2026 05:20 PM PHT

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natural gas

indigenous natural gas

BIR

VAT exemption

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