President Ferdinand Marcos Jr. has issued an executive order granting real property tax breaks to independent power producers operating under Build-Operate-Transfer contracts with state-owned corporations. | NCorralesINQ /PDI
“While IPPs are taxable entities liable to pay the said RPTs, a substantial portion of the RPT has been contractually assumed by the National Power Corp. /Power Sector Assets and Liabilities Management Corporation under the Build-Operate-Transfer scheme and similar contracts, and therefore carry the full faith and credit of the National Government,” the EO said.
Indeed, for years, IPPs, or those who own power generation facilities and sell electricity to distributors such as Manila Electric Co. , have been fighting local governments’ threats to deny them business permits or to take over their operations due to real property tax issues.The Philippine Independent Power Producers Association Inc., which includes the country’s energy generation companies, had pointed out that these threats could negatively impact power supply.
This included the BOT scheme contracts of the IPPs denominated as power purchase agreements, energy conversion agreements or other contractual agreements with GOCCs that were assessed by the local governments imposing the real property taxes “for all the years up to CY 2023.”
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