Duterte lowers realty taxes of independent power producers

President Rodrigo Duterte has ordered the reduction of real property taxes and penalties imposed on power generation facilities of independent power producers (IPP) under build-operate-transfer (BOT) contracts with government-owned or -controlled corporations.

Duterte on Thursday signed Executive Order 126, which covered all liabilities for real property taxes including any special levies accruing to the Special Education Fund for calendar year 202 on property, machinery, and equipment used by IPPs for the production of electricity under a BOT scheme and similar contracts.

These contracts include power purchase, energy conversion, or other contractual deals with government-owned and -controlled corporations which were assessed by entities authorized to impose real property tax for all years up to 2020 such as local government units.

“They are hereby reduced to an amount equivalent to the tax due if computed based on an assessment level of 15 percent of the fair market value of the said property, machinery and equipment depreciated at the rate of two percent per annum, less any amounts already paid by the IPPs,” Duterte said in the order.

“All interests on such deficiency real property tax liabilities are hereby condoned and concerned IPPs are relieved from payment thereof,” the president added.

He also said that all real property taxes made by the IPPs over and above the reduced amount would be applied to their dues in the succeeding years.

In his order, President Duterte acknowledged that IPPs “contribute largely to tax revenues for the national government and local government units and provide grid capacity of around 3,100 megawatts.”

“Their closure or non-operation will entail substantial losses to the government and force resort to more costly electric power source alternatives or the implementation of rotating power outages,” he said.

Duterte’s executive order would take effect immediately upon its publication in the Official Gazette or a newspaper of general circulation.

He also noted that a president can condone or reduce the real property tax and interest for any year in any province, city, or municipality within the Metropolitan Manila area when public interest requires it.

Government-owned or -controlled corporations engaged in the generation and transmission of electricity enjoy a number of privileges in real property taxes, including an assessment level of 10 percent on all its lands, buildings, machineries and other improvements, as stated in the Local Government Code.


Credit belongs to : www.tribune.net.ph

Check Also

PPCRV receives close to 80,000 poll returns

The Parish Pastoral Council for Responsible Voting (PPCRV) has so far received a total of …