Philippines: Duterte cuts tax liabilities of some power producers

Philippines: Duterte cuts tax liabilities of some power producers

President Rodrigo Duterte has reduced and condoned the real property taxes
and penalties assessed on the power generation facilities of certain
independent power producers (IPPs).

Executive Order 19 reduces the 2015 and 2016 liabilities for real property
tax on property, machinery, and equipment that the IPPs used for the
production of electricity under the build-operate-transfer scheme with
government-owned-and-controlled corporations (GOCCs).

The liabilities are reduced to an amount equivalent to the tax due if
computed based on an assessment level of 15 percent of the fair market value
of the property, machinery, and equipment depreciated at the rate of two
percent per annum.

The interests on the real property tax liabilities are condoned and the IPPs
will no longer need to pay these.

EO 19 states that, since a substantial part of the real property taxes being
charged against the IPPs has been contractually assumed by the National
Power Corp., the Power Sector Assets and Liabilities Management Corp.
(Psalm) and other GOCCs, paying these would impose massive direct
liabilities on the part of he GOCCs.

This could threaten their financial stability, drive up energy prices, and
trigger further cross-defaults and significant economic losses across all
sectors.

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Link to Original Article:
http://business.inquirer.net/228810/duterte-cuts-tax-liabilities-of-some-pow
er-producers

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com