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[av_heading heading=’PECO owes city P44M’ tag=’h3′ style=’blockquote modern-quote’ size=” subheading_active=’subheading_below’ subheading_size=’15’ padding=’10’ color=” custom_font=”]
BY GLENDA SOLOGASTOA
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ILOILO City – Panay Electric Company (PECO) owes the city government over P44 million in unpaid real property tax covering the period 2006-2016.
But collecting this is a problem. PECO may pass the tax burden to its around 57,000 consumers.
“PECO may charge it directly to consumers without applying sa ERC. Automatic ina, amo na ang ilang posisyon,” said Councilor RLeone Gerochi, chairperson of the Sangguniang Panlungsod’s (SP) committee on public utilities.
On Tuesday, PECO corporate communications officer Mikel Cacho Afzelius met with city councilors and officials of the City Assessor’s Office, City Treasurer’s Office and City Accountant’s Office. They agreed to explore ways to resolve the tax collection problem without hurting consumers.
“We want to know kun pila ka sentimos ang idugang per kilowatt hour. We have to explain this para ma-picture out sang pumoluyo kun ano bala ang impact,” said Gerochi.
According to Zonida Aguilos of the City Treasurer’s Office, however, the P44 million was based on partial assessments made in 2013 yet of PECO’s 10,733 electrical posts made of wood, steel and concrete scattered across 180 barangays.
The City Assessor’s Office is currently conducting a validation of the electrical posts and other PECO machineries considered taxable real properties. The real property tax collectibles may thus increase.
“We have to observe other cities first kun ano hulag nila. We have to remain competitive,” said Afzelius.
On Aug. 5, 2015, the Supreme Court decided on the case “Manila Electric Company vs. the City Assessor and City Treasurer of Lucena City.” It ruled that machineries — including transformers, electric posts, transmission lines, insulators, and electric meters — are not exempted from real property taxes.
“We will try to minimize the impact if ever. We will try to work it out na indi makalab-ot sa dira,” said Afzelius.
He insisted that PECO was already charging less – P10.16 per kilowatt hour for residential consumers; P9.60 per kilowatt hour for commercial consumers; and P9.50 per kilowatt hour for the city government.
“Grabe ang obra namon para lang magnubo ang rates naton sa Iloilo,” Afzelius said.
The city government sent a demand letter to PECO in 2013 but the power distribution firm maintained that its electrical posts were not taxable.
In 2014, another demand letter was sent to PECO but the firm failed to answer.
Just this Sept. 15, the city government sent another demand letter on the payment of real property tax.
City Assessor Nelson Parreño recently said the Supreme Court ruling was “very favorable, considering that it will generate more revenues for the city.”
Section 199 (o) of Republic Act 7160 (R.A. 7160), or the Local Government Code of 1991, defines “machinery” as machines, equipment, mechanical contrivances, instruments, appliances or apparatus which may or may not be attached, permanently or temporarily, to the real property.
It includes the physical facilities for production, the installations and appurtenant service facilities, those which are mobile, self-powered or self-propelled, and those not permanently attached to the real property which are actually, directly, and exclusively used to meet the needs of the particular industry, business or activity and which by their very nature and purpose are designed for, or necessary to its manufacturing, mining, logging, commercial, industrial or agricultural purposes.
The law further provides that these “machineries,” though not attached permanently to the real properties of PECO, are actually, directly and exclusively used to meet the needs of their business of distributing electricity, the press release stated./PN
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