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Government waives penalties,

cuts taxes on facilities of IPPs
Zinnia B. Dela Peña (The Philippine Star) - February 2, 2015 - 12:00am

MANILA, Philippines - With the country facing imminent power crisis, the government has reduced the
real property taxes and waived the penalties imposed on the facilities of independent power producers
(IPPs) under build-operate-transfer contracts with government-owned or controlled corporations.

The Bureau of Internal Revenue issued memorandum circular 6-2015 stating President Aquino’s
directive that all liabilities for real property tax on property, machinery and equipment of IPPs are
reduced to an amount equivalent to the tax due if computed based on an assessment level of 15
percent This
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The same order states that all fines, penalties and interest on such deficiency real property tax
liabilities are also condoned and the concerned IPPs are relieved from payment thereof.

The directive was issued after various LGUs threatened to seize the assets of delinquent IPPs and sell
them at a public auction to settle their tax obligations.

According to the BIR, various LGUs have taken the position that IPPs operating within their territories
which are not GOCCs are not entitled to the exemptions/privileges of GOCCs with respect to real
property taxes on their property, machinery and equipment used in the generation and distribution of
electric power.

“The payment of said real property taxes affected by the IPPs , some of which obligation have been

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 “The payment of said real property taxes affected by the IPPs , some of which obligation have been
contractually assumed by the GOCCs and carries the full faith of the national government, threatens
the financial stability of the GOCCs, the government’s fiscal consolidation efforts and the stability of
energy prices,” Henares said.

Henares said the forcible collection of real property taxes would trigger massive direct liabilities on the
part of the National Power Corp./Power Sector Assets and Liabilities Management Corp.

She noted this may increase the cost of electricity and trigger further cross-defaults and significant
economic losses across all sectors.

BUREAU OF INTERNAL REVENUE GOCCS HENARES IPPS NATIONAL POWER CORP POWER

POWER SECTOR ASSETS AND LIABILITIES MANAGEMENT CORP PRESIDENT AQUINO PROPERTY REAL

SPONSORED ARTICLES

< >

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