The National Electrification Administration (NEA) is finding ways to free the 121 electric cooperatives (ECs) it supervises from paying taxes under House Bill 5636 or the proposed Tax Reform for Acceleration and Inclusion Act of President Rodrigo Duterte.
NEA Administrator Edgardo Masongsong said they are currently working with rural electrification advocates from both the executive and legislative branches of government to turn this hope into a reality.
This is to even things out with the ECs registered under the Cooperative Development Authority (CDA), which enjoy such privileges per the provisions of Republic Act (RA) 7160 or the Local Government Code of 1991.
The state-owned corporation tasked to implement rural electrification in the Philippines is trying to get the Department of Justice’s (DOJ) support on its position that the same law could be applied to power coops under the NEA management too.
“We are looking forward to have the favorable opinion of the DOJ that the electric cooperatives registered with NEA be tax-exempt as well,” Masongsong said.
The NEA chief mentioned that Senator Sherwin Gatchalian, chairman of the Senate Committe on Energy and his counterpart in the Lower House, Marinduque Rep. Lord Allan Jay Velasco, have been involved in these discussions along with the Departments of Energy and Finance.
According to Chapter 3, Section 13 of RA 10531, the law governing the NEA, all non-stock and non-profit rural energy distribution utilities are entitled to preferential rights granted to cooperatives under the Local Government Code of 1991 and other related laws.
“As a further incentive, the NEA may prioritize the grant of incentives in favor of electric cooperatives that are managed effectively and efficiently and comply consistently with its mandates and directives,” RA 10531 added.