Collection of real property taxes from Beneco to be studied

BAGUIO CITY – Vice Mayor Faustino A. Olowan proposed the conduct of an executive-legislative meeting to discuss the position of the city government on whether or not to pursue the collection of real property taxes on the electric poles of the Benguet electric Cooperative (BENECO0.

Olowan made the proposal during the deliberations of a letter from BENECO that informed the city government that the Philippine Rural Electric Cooperatives Association (PHILRECA), the association of the 121-strong rural electric cooperatives in the country, filed a petition for the adoption of the set of rules to allow the passing of real property tax to consumers of local governments that impose the collection of the same to the electric cooperatives now pending with the Energy Regulatory Commission (ERC).

City Assessor Maria Almaya Addawe said that based on available data, Beneco already owes the city government some P21 million in real property taxes for its over 3,000 electric poles from 1991 to the present.

The vice mayor said that it is best for city officials to discuss the matter with concerned Beneco officers during an executive-legislative meeting so that appropriate measures could be agreed upon to prevent the uncollected real property taxes on electric poles from being passed to the consumers that will eventually translate to an increase in the power rate for consumers within the jurisdiction of the city.

Beneco corporate legal counsel Delmar Cariño pointed out that there is no component in the current power rate being charged to the consumers that is why once the city government will compel the electric cooperative to settle its unpaid real property taxes, then Beneco will be forced to pass on the same to the consumers of the city or apply for an increase in the rate to cover the imposed real property taxes on its electric poles.

Currently, the ERC is still deliberating the merits of the PHILRECA petition to issue the necessary set of rules to allow the electric cooperatives to pass on to the consumers of local governments that impose the collection of real taxes from the real estate properties of electric cooperatives.

However, once Beneco will be converted into a stock cooperative and registered with the Cooperative Development Authority (CDA), it will be exempted from the imposition of taxes provided that it will be able to secure a certificate of tax exemption from the CDA to prevent local governments from assessing and collecting real property taxes from the rural electric cooperative.

Beneco is a rural electric cooperative registered with the National electrification Administration (NEA) pursuant to Presidential Decree (PD) No. 269 that created the NEA and the rural electric cooperatives to help in advancing the government’s rural electrification program to help bring reliable power to the far-flung communities of the country.
Rural electric cooperatives have been described to be special type of cooperatives because power distribution is a service endowed with public interest compared to the other types of cooperatives defined under the old and revised CDA laws./Dexter A. See