Board member: Tax electric coops now

By Florence F. Hibionada

Sunday, November 27, 2011

THE Provincial Board is set to deliberate the imposition of real property tax (RPT) from all electric cooperatives in Iloilo City.

Board Member Gerardo Flores, in a privilege speech Friday, proposed the move as he pointed out to the body a Supreme Court (SC) ruling that supposedly allows now RPT collection.

Such, as he noted the lifting of an earlier temporary restraining order (TRO) that held off imposition of said tax dues.

Electric cooperatives in the country, including the Iloilo I Electric Cooperative Inc. (Ileco 1), hurled to court the Department of Interior and Local Government and the Department of Finance.

The contention was that Sections 193 and 234 of Republic Act 7160, otherwise known as the Local Government Code, were unconstitutional.

The electric cooperatives’ position was that government incentives are in place and guaranteed among others the permanent exemption from payment of income taxes. The group said Presidential Decree 269 covered this, thus the exemption from payment of local taxes, including RPT.

While Sections 193 and 234 of RA 7160, the electric cooperatives said, effected the withdrawal of said tax exemption. The group added the provision discriminated the industry and was “in violation of equal protection of the law clause.”

But Flores said the petition and position of the electric cooperatives have been denied after the earlier TRO issued was lifted.

“With the above decision of the Supreme Court, only those cooperative under the Cooperative Code of the Philippines are exempted from the LGU’s taxing powers and effect, renders Ileco 1 and the rest of the electric cooperatives in Iloilo, which are not registered under RA No. 6938, taxable,” Flores said.

“In this regard, this representation would like to propose that with the lifting of the TRO, the provincial assessor and the municipal assessor to make a classification, appraisal and assessment of all properties of Ileco I, II, III, and to assess the taxes of these electric cooperatives on every host LGU for ten years thereto,” Flores added.

At the center of this recurring issue is the Department of Justice’s stance that in order for a cooperative to enjoy incentives granted by RA 6938, the registration with the Cooperative Development Authority (CDA) is required. With that, no CDA registration, no exemption.

The Bureau of Local Government Finance in Memorandum Circular No. 13-2003 stated that the same wherein only electric cooperatives registered with the CDA are exempt from RPT.

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