MANILA — The Department of Finance (DOF), following the Bureau of Internal Revenue’s (BIR) recommendation, has issued new revenue regulations granting value-added tax (VAT) exemptions on indigenous natural gas and electricity generated from it.

The move supports the development of the country’s natural gas industry and aligns with directives from President Ferdinand R. Marcos Jr. and Finance Secretary Frederick Go to promote priority industries while strengthening revenue administration.

The regulations implement fiscal incentives under Republic Act 12120, which aims to promote natural gas as a safe, efficient, and cost-effective energy source. VAT exemption applies to the sale and purchase of indigenous natural gas, aggregated gas (limited to the indigenous portion), and electricity generated using such gas, including related ancillary services.

Eligible participants include suppliers, aggregators, resellers, and generation facilities in the Philippine downstream natural gas industry, subject to certification by the Department of Energy (DOE). To qualify, entities must secure endorsements from DOE bureaus confirming their volume of indigenous natural gas sold or electricity produced.

The regulations also include safeguards to prevent misuse: entities availing of fiscal incentives under the Tax Code cannot simultaneously claim similar incentives under RA 12120 or other special laws.

BIR Commissioner Charlito Martin Mendoza said the guidelines aim to support investment, lower energy costs, and strengthen the integrity of the tax system.

The regulations will take effect 15 days after publication in the Official Gazette or on the BIR website, whichever comes first.