Aquino reduces IPPs real property tax

WITH the expected energy crisis next year, President Benigno Aquino 3rd has issued an executive order reducing the real property tax for independent power producers (IPPs) operating under the government’s build-operate-transfer (BOT) programs.

Aquino signed Executive Order 173, or the “Reduction and Condonation of Real Property Taxes and Interest/Penalties Assessed on the Power Generation Facilities of Independent Power Producers Under Build-Operate-Transfer Contracts with Government-Owned and/or Controlled-Corporations” on Friday, October 31, to forestall possible increases in the cost of electricity as result of the “forcible collection” of the said taxes from IPPs. “The payment of said real property taxes by the affected IPPs, some of which obligation have been contractually assumed by the GOCCs and carries the full faith of the National Government, threatens the financial stability of the GOCCs, the government’s fiscal consolidation efforts, and the stability of energy prices,” the EO said.