PSALM remits P500 million to BIR, settles tax issues

MANILA, Philippines — The Power Sector Assets and Liabilities Management Corp. (PSALM) has paid P500 million to the Bureau of Internal Revenue (BIR) as part of a deal for a mutually advantageous global settlement of pending tax issues.

PSALM said the deal is consistent with the whole-of-government approach promoted by President Duterte.

Under the deal, PSALM remitted P517.71 million to the BIR to end long outstanding tax cases covering taxable years 2006 to 2016 as well as various disputed tax assessments for taxable years 2017 and 2019.

“This global settlement of all 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,” PSALM president and CEO Irene Besido-Garcia said.

PSALM said the government-to-government arrangement with the BIR ensures a clean slate for the state-run firm.

It will also lead to the dismissal of numerous pending tax cases between the two agencies. This means that time and resources of both government agencies spent on protracted litigations will be saved.

PSALM utilized its unrestricted and available funds to settle 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 Corp. (NAPOCOR).

The remittance of PSALM will also contribute to the revenue collection efforts of the BIR towards achieving its 2021 collection target.

Finance Secretary Carlos Dominguez earlier expressed confidence that the BIR would be able to overshoot its P2.08 trillion collection target for 2021.