Power cooperatives exempted from local gov’t taxes

FILE PHOTO: Department of Energy (DOE) facade. Images from DOE / INQUIRER FILES

MANILA, Philippines — The government has moved to exempt qualified electric cooperatives nationwide from paying local taxes, with the Department of Energy (DOE) seeing this as a way to hit the 100-percent electrification target.

The DOE announced on Wednesday that Energy Raphael Lotilla and Finance Secretary Ralph Recto had signed a joint memorandum circular for the exemption of all electric cooperatives as long as they meet the financial and operational standards of the National Electrification Administration (NEA).

According to the DOE, local taxes include real property taxes, business tax, franchise tax and tax on transfer of real property ownership.

To avail of the exemption from local taxes, the DOE said power cooperatives need to have at least a 75-percent rating based on NEA’s compliance parameters, which include the following: high collection efficiency, positive net worth, system reliability, and system loss standards, as well as the conduct of annual general membership assemblies and district elections.

They must also deploy efforts meant to deliver 100-percent customer connection.

Yearly

Once they meet these criteria, the cooperatives can secure a certificate of compliance from the NEA, which would be issued annually.

The DOE also said the NEA would create the rules governing the issuance of the certificate.

“This local tax exemption is a significant milestone for our qualified electric cooperatives, as it directly translates to reduced financial burdens that can be reinvested into improving services and achieving 100-percent total electrification,” Lotilla said.