Realty taxes on power plants of IPPs reduced

President Duterte has reduced the real property taxes assessed on the power generation facilities of independent power producers (IPP) under build-operate-transfer contracts with government owned and controlled corporations (GOCCs) to keep energy prices stable. Mr. Duterte also condoned the interests and penalties on the real property taxes of the IPPs. In Executive Order No. 157, Mr. Duterte noted that local governments have taken the position that IPPs in their territory are not subject to the same exemptions and privileges enjoyed by GOCCs with respect to the real property taxes on their property, machinery and equipment used in power production and distribution. If the amount demanded by local governments would be collected, it could affect energy prices and the financial stability of the National Power Corp., he said. “It may even trigger further cross-defaults and significant economic losses across all sectors,” he said. He also said the nonoperation or closure of the IPPs would result in substantial losses to the government and cause it to resort to more costly electric power source alternatives or the implementation of rotating power outages. —Leila B. Salaverria