LUCENA CITY—The Quezon provincial governor has expressed opposition to the condonation scheme being proposed by the national government in resolving the issue of the P6.1-billion real property tax (RPT) debts the Pagbilao power plant owes to Quezon province.
“The condonation scheme is an option being proposed by the national government but it is improper and may be unconstitutional and the provincial government’s fundamental concern is in collecting the Pagbilao plant’s P6.1-billion RPT obligations to the province,” Gov. David Suarez said in a recent ambush interview at Camp Nakar here after the formal turnover of land donated for Quezon policemen. The ceremony was attended by chief Raul Bacalso of the Philippine National Police.
Suarez said that resorting to condonation by the national government may even cause the insurgency problem to rise because it would be perceived as favoring foreign investors.
He said that he sees legal problems for condonation as it is allowed only in cases of natural calamities such as typhoon or there is a failure of crops.
“Even a small sari-sari store gets to pay tax to the government so why is the Pagbilao power plant which is earning about $400 million a year unable to pay its RPT obligation to us?” the governor asked, adding that he is standing pat in trying to collect the tax due the province.
Suarez has set a new auction date of March 9 for the 730 megawatts coal-fired power plant in Pagbilao for failure of paying its RPT debts to the province.
“We have given the national government all the leeways to resolve the issue but unless it comes up with new and more options for our province, our auction plan for March 9 proceeds,” he said even as he stressed that he is still open for any amicable settlement with Malacañang and that he is always ready to yield to the wisdom of the President.
Suarez said that serious bidders in the planned Pagbilao power-plant auction included Aboitiz Power Corp., business magnates Ramon Ang of San Miguel Corp., Manuel Pangilinan of PLDT and Lucio Tan of Fortune Tobacco Corp.
Suarez said that RPT payment of the Pagbilao power plant means a lot to the province which is in a dire financial situation as it grapples with a P770- million loan from the LandBank inherited from the previous administration and P140 million is due to be paid this year.
Earlier, Webster Letargo, Suarez’s chief of staff, disclosed that in lieu of payment for the over P6-billion RPT debts of the Pagbilao power plant to Quezon province, President Aquino allegedly proposed the issuance of an Executive Order (EO) for the condonation of the total RPT obligation to the provincial government.
“President Aquino told Governor Suarez that he is ready to sign an EO for the condonation of the P6.1-billion RPT debts the Pagbilao plant owes the province,” said Letargo in an exclusive interview with the BusinessMirror last week, adding that Aquino even allayed concerns of Suarez with the issuance of the EO.
Letargo was with Suarez and provincial attorney Charisse Ann Bajas on Feb. 7 in a meeting with President Aquino and his staff in Malacañang to thresh out the planned auction move of the Pagbilao power plant by the provincial government.
The planned auction was postponed twice already—first on Jan. 26, then on Feb. 9—due to the request of President Aquino to Suarez fearing its repercussion to the power investors in the country.
The Supreme Court has promulgated in its final decision on July 29 last year that Team Energy (TE) Corp., which runs the Pagbilao power plant, is liable to pay the P6.1-billion RPT debts to the province disregarding the claim of the National Power Corp. (Napocor) as contained in its Energy Conversion Agreement with TE.
The President, according to Letargo, had proposed infrastructure projects for Quezon province worth P1.5 billion instead of the actual financial settlement of the RPT debts which the Quezon governor insists.
Malacañang also insists on a mere 15-percent assessment level of the RPT payment by the Pagbilao plant which would amount to about P300 million for Quezon, said Letargo.
“The Mauban power plant is paying right under an 80-percent assessment level for its RPT obligation to the province. Why would it be different for the Pagbilao plant?” asked Letargo.
Suarez spoke recently with members of the Sangguniang Panglalawigan (SP) regarding the issue. The SP has given Suarez a blanket authority for the settlement of the RPT debts by the Pagbilao plant which supplies about 20 percent of the power requirements in Luzon.
Meanwhile, former Quezon provincial board member Sonny Pulgar has proposed the idea of settling the controversial issue of the P6-billion real-estate tax debts of the Pagbilao power plant to the Quezon provincial government through the “transfer” of all the assets of the Napocor to the local government of Quezon.
Pulgar of Sentro ng Gabay Legal sa Quezon said that Napocor has residual assets in the form of incorporeal rights and receivables which can be tapped to satisfy the claims of the LGUs and avert another “tax faux pas” unpalatable to foreign investors.
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