State-managed electric cooperatives across the nation, all 121 of them, should be spared from a comprehensive tax reform program that the Duterte administration is pushing vigorously, according to the National Electrification Administration (NEA).
NEA Administrator Edgardo Masongsong said the agency was pursuing support from the Department of Justice on NEA’s position that tax privileges accorded to power cooperatives registered with the Cooperative Development Authority (CDA) be applied also to the 121 utilities.
According to the CDA, the Cooperative Code grants cooperatives tax exemption “to enable them to develop into viable and responsive economic enterprises and thereby fulfill their purpose of serving the need of the members.”
“We are looking forward to have the favorable opinion of the DOJ that the electric cooperatives registered with NEA be tax-exempt as well,” Masongsong said.
He said the NEA was engaged in discussions along this line with energy committees in both the Senate and the House of Representatives as well as the departments of Energy and of Finance.
Citing Republic Act No. 10531, which amends the NEA Charter to strengthen the agency, Masongsong said all non-stock and non-profit rural energy distribution utilities were entitled to preferential rights granted to cooperatives under the Local Government Code of 1991 and other related laws.
He said that RA 10531 allowed NEA to prioritize the grant of incentives to electric cooperatives that were managed effectively and efficiently and which complied consistently with its mandates and directives.
Last June, Finance Undersecretary Karl Kendrick T. Chua said cooperatives were among interest groups that have been very vocal in seeking exemptions from tax reform.
“For those who want exemptions, I tell them that there is no free lunch,” Chua said. “If (one party is given) an exemption, somebody else would have to (take up that burden). It cannot be that everything is free from heaven.”
“In the DOF, we are not here to defend a sector or promote (a particular) interest,” he said. “We’re here to raise money for this entire country’s needs and to look after this country’s future.”
Even then, Chua said the DOF was open to discussing interest groups’ concerns and considering their proposals.
In terms of efforts toward full, nationwide electrification, the NEA’s latest goal is to achieve this by 2022.