Vizcaya govt seeks to collect P1.7-B tax from US power firm

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BAYOMBONG, Nueva Vizcaya: The Provincial government here is pursuing an administrative remedy by issuing a demand letter to the California-based Casecnan Water and Energy Company (CWEC).

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Gov. Ruth Padilla said on Monday that the letter has to be issued to the CWEC, contractor of the Casecnan Multi-Purpose Irrigation and Power Project (CMIPP) in Alfonso Castañeda town to remind them of their “long overdue” tax obligation to the province.

The CWEC is managing and operating the CMIPP. It reportedly agreed last year, after a series of negotiations, to pay a whooping P1.7 billion in real property tax to the provincial government on a staggered basis.

However, the CWEC reportedly changed its stand and informed the government that it will only pay taxes after the Department of Finance (DOF) concurs to it.

Prompted by an instruction from the office of the governor, the provincial treasurer’s office issued the demand letter along with the notice of RPT tax assessment as an administrative remedy to collect the unpaid RPT obligation to the provincial government.

Provincial Legal Officer Voltaire Garcia said the taxes due for payment soared to more than P1.86 billion, including penalties as of January 2015.

“We are now waiting for the response of the company. But, even if the company does reply, the provincial treasurer’s office can proceed with a public auction following the procedures provided in the Local Government Code,” Garcia said.

Earlier, President Benigno Aquino 3rd issued Executive Order (EO) 173 ordering the condonation and reduction in the computation of applicable taxes of Independent Power Producers (IPPs) under the Build and Operate Transfer scheme.

CWEC claimed it is covered by EO173 because it falls under the category of an IPP. Garcia disagrees and has opined that an administrative remedy can resolve the issue.

“We are coordinating with the provincial government of Nueva Ecija which is also affected by the issuance of that EO. At the same time, we opt to continue to implement all available administrative remedies based on the Local Government Code,” Garcia said.

CalEnergy is the owner and operator of the giant $580-million CMIPP, a hydroelectric facility composed of two impounding dams and a power plant, connected by a pair of 26-kilometer tunnels. Its authority was given during the Ramos administration to address the power crisis that hit the country in the 1990s.

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