BONTOC, Mountain Province October 14 – “Even electric poles are subject for local taxation.” This is the gist of the on-going exchange of views between the local governments and the Mountain Province Electric Cooperative (MOPRECO).
In a recommendation letter to the legal officer of the province dated October 6, 2015, Provincial Treasurer Cawed A. Gamonnac reiterated his previous stands that as long as the local assessors assess the real properties, including electric poles and towers, of the said cooperative as taxable, the province has no recourse but to enforce collection of taxes due on their properties as provided on the Local Government Code (LGC) of 1991.
The LGC specifically provide that tax exemptions or incentives that the cooperatives previously enjoyed by the petitioner were all withdrawn by the effectivity of the local government code particularly on Section 193.
“…unless otherwise provided in the LGC, tax exemptions or incentives granted to, or presently enjoyed by all persons, whether natural or judicial, including government-owned or controlled corporations, except local water districts, cooperatives duly registered under R.A. No. 6938, non-stock and non-profit hospitals and educational institutions, are hereby withdrawn upon the effectivity of this code.”
It was gathered that cooperative under RA No. 6938 otherwise known as the Cooperative Code of the Philippines, is free from taxation provided that they are duly registered association of persons, with a common bond of interest and making equitable contributions to the capital required, and with accumulated reserves and undivided net savings of not more than Ten million pesos (P10,000,000.00).
Likewise, in Section 206 of the LGC also stated that “Every person by or for whom real property is declared, who shall claim tax exemption for such property under this Title shall file with the provincial, city or municipal assessor within thirty (30) days from the date of the declaration of real property sufficient documentary evidence in support of such claim including corporate charters, title of ownership, articles of incorporation, bylaws, contracts, affidavits, certifications and mortgage deeds, and similar documents. If the required evidence is not submitted within the period herein prescribed, the property shall be listed as taxable in the assessment roll. However, if the property shall be proven to be tax exempt, the same shall be dropped from the assessment roll.”
In previous arguments, MOPRECO headed by Engineer Jude A. Domoguen and Mr. Darwin a. Facullo, General Manager and Finance Manager respectively alleged that electric poles are not real properties, but classified, instead, as personal properties citing the Bureau of Local Government Finance (BLGF) opinion dated March 10, 2010 stating that “ not all properties actually, directly and exclusively used to meet the needs of a particular industry, business or activity are considered real property for RPT purposes; and NEA Memo. No. 2011-088, of the Honorable Administrator, Edita S. Bueno, to all Cooperatives dated February 16, 2011 and the memorandum of Department of Energy Secretary Jose Rene Almendras to the NEA stating that cooperatives are exempt from paying real property taxes.
On the other hand, the provincial treasurer argued that the petitioner failed to present their proof of exemption to the local assessors. He advised that they should pay first their accumulated taxes and annotate it as paid “under protest” prior to contesting, not the tax due, but rather the assessment of their properties by the local assessors as taxable.
Section 252 local code provides that “no protest shall be entertained unless the taxpayer first pays the tax. The taxpayer is required to annotate or write on the tax receipts the words “paid under protest”.
The treasurer added that the same amount shall be reimbursed to them if court found probable cause that they are exempt from taxation.
Based from the final notice served by the local government of Bontoc, the petitioner accumulated an amount of One Million Three Hundred Sixty Thousand Pesos & 6/100 (P 1,360,349.06) including interests and surcharges as of September 30, 2015 tax due on their real property particularly on their electric poles and towers.
Meanwhile, along with MOPRECO, some government instrumentalities particularly National Irrigation Administration (NIA) and National Food Authority (NFA) are also subjects of the same collection cases.
