MANILA – The Philippine government has decided to lower the real property taxes and has also opted to forgo the penalties slapped on the facilities of independent power producers (IPPs) involved in “build-operate-transfer” contracts with corporations owned or controlled by the government.
This decision was reached by the Aquino administration, on account of looming power crisis, and is provided for in memorandum circular 6-2015 issued by the Bureau of Internal Revenue (BIR).
The memorandum states that:
• All liabilities for real property tax on property, machinery and equipment of IPPs will be lowered to an amount equivalent to the tax due, and computed based on an assessment level of 15 percent of the fair market value of the property, machinery and equipment depreciated at the rate of two percent per annum
• All fines, penalties and interest on such deficiency real property tax liabilities are also condoned and the concerned IPPs are relieved from payment thereof
“The payment of said real property taxes affected by the 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,” BIR Commissioner Kim Henares said.