PRESIDENT Rodrigo R. Duterte ordered the reduction of real property taxes charged against independent power producers (IPP) which participated in partnerships with the government in 2019.
The Palace released Executive Order (EO) No. 117 Wednesday calling for the reduction and condonation of real property taxes, interest, and penalties due from IPPs holding Build-Operate-Transfer (BoT) contracts with government-owned or controlled corporations (GOCCs) in 2019.
Mr. Duterte said in the EO signed on July 24 that IPPs generate tax revenue while providing around 3,100 megawatts worth of power.
“Their closure or non-operation will entail substantial losses to the government and force resort to more costly electric power source alternatives or the implementation of rotating power outages,” he said.
The EO said liabilities involving real property tax on property, machinery, and equipment used by the IPPs in 2019 under a BoT or similar arrangement with GOCCs will be “reduced to an amount equivalent to the tax due if computed based on an assessment level of fifteen percent (15%) of the fair market value of said property, machinery and equipment depreciated at the rate of two percent (2%) per annum, less any amounts already paid by the IPPs.”
The EO added that IPPs are exempt from paying interest and penalties on such liabilities. — Gillian M. Cortez