MALACAÑAN PALACE
MANILABY THE PRESIDENT OF THE PHILIPPINES
EXECUTIVE ORDER No. 173
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
WHEREAS, under Section 234 of Republic Act No. 7160 (Local Government Code of 1991), Government-Owned and/or -Controlled Corporations (GOCCs) engaged in the generation and transmission of electricity enjoy a number of exemptions/privileges with respect to real property taxes, including an assessment level of 10% on all its lands, buildings, machineries and other improvements (Sections 216 and 218), as well as an exemption for all machinery and equipment that are actually, directly and exclusively used in the generation and transmission of electric power and machinery and equipment used for pollution control and environmental protection;
WHEREAS, various Local Government Units (LGUs) have taken the position that Independent Power Producers (IPPs) operating within their territories which are not GOCCs are not entitled to the exemptions/privileges of GOCCs with respect to real property taxes on their property, machinery...
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Executive Orders
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
Executive Order No. 173
Summary of Executive Order No. 173
Reduction and Condonation of Real Property Taxes and Interest/Penalties on Power Generation Facilities of Independent Power Producers (IPPs) under Build-Operate-Transfer Contracts with Government-Owned and/or -Controlled Corporations (GOCCs):
- Reduction of real property tax liabilities (Section 1):
- For property, machinery and equipment used by IPPs for electricity production under Build-Operate-Transfer contracts with GOCCs.
- Assessed by Local Government Units (LGUs) and other entities for all years up to 2014.
- Reduced to an amount equivalent to 15% of fair market value, depreciated at 2% per annum.
- Less any amounts already paid by the IPPs.
- Condonation of fines, penalties and interests (Section 1):
- All fines, penalties and interests on the deficiency real property tax liabilities are condoned.
- IPPs are relieved from payment thereof.
- Compliance by all government entities (Section 2):
- All concerned departments, agencies, instrumentalities, GOCCs and LGUs are ordered to strictly comply.
- Repealing Clause (Section 3):
- All orders, issuances, rules and regulations inconsistent with this Order are repealed, amended or modified.
- Separability Clause (Section 4):
- If any provision is declared invalid or unconstitutional, other unaffected provisions remain valid.
- Effectivity Clause (Section 5):
- This Order takes effect immediately upon publication in a newspaper of general circulation.
Reduction and Condonation of Real Property Taxes and Interest/Penalties on Power Generation Facilities of Independent Power Producers (IPPs) under Build-Operate-Transfer Contracts with Government-Owned and/or -Controlled Corporations (GOCCs):
- Reduction of real property tax liabilities (Section 1):
- For property, machinery and equipment used by IPPs for electricity production under Build-Operate-Transfer contracts with GOCCs.
- Assessed by Local Government Units (LGUs) and other entities for all years up to 2014.
- Reduced to an amount equivalent to 15% of fair market value, depreciated at 2% per annum.
- Less any amounts already paid by the IPPs.
- Condonation of fines, penalties and interests (Section 1):
- All fines, penalties and interests on the deficiency real property tax liabilities are condoned.
- IPPs are relieved from payment thereof.
- Compliance by all government entities (Section 2):
- All concerned departments, agencies, instrumentalities, GOCCs and LGUs are ordered to strictly comply.
- Repealing Clause (Section 3):
- All orders, issuances, rules and regulations inconsistent with this Order are repealed, amended or modified.
- Separability Clause (Section 4):
- If any provision is declared invalid or unconstitutional, other unaffected provisions remain valid.
- Effectivity Clause (Section 5):
- This Order takes effect immediately upon publication in a newspaper of general circulation.