MANILA — President Benigno Aquino III has signed an Executive Order that grants the reduction and condonation of real property taxes and interest/penalties for independent power producers (IPP), Malacanang said Sunday.
The new EO 173 signed on October 31, 2014 covers real property taxes and interest/penalties assessed on the power generation facilities of IPPs under build-operate-transfer contracts with government-owned and/or -controlled corporations.
Because of this. real property taxes imposed by local government units for all years up to 2014 on “property, machinery, and equipment actually and directly used by IPPs for the production of electricity under a build-operate-transfer contract will be reduced.
The reduction will be equivalent to the tax due with computed date on assessment level of 15 percent of the fair market value of said property, machinery, and equipment depreciated at the rate of two percent per annum . This is already less any amounts already paid by the IPPs.
In the radio interview with dzRB Radyo ng Bayan, Presidential Communication Operations Office Secretary Herminio Coloma, Jr., said that this is to prevent any liabilities from the part of the National Power Corporation that could lead to an increase or spike in the cost of electricity.
“The same executive order also stated that “all fines, penalties, and interest on such deficiency, real property tax liabilities are also hereby condoned and the concerned IPPs are relieved from payment thereof,” Coloma said. (with a PND report)