September 24, 2018 | 12:06 am
ENERGY Development Corp. (EDC) has
called on the government to rethink its plan to remove the incentives currently
enjoyed by renewable energy developers, a move which it called misguided the
wrong direction for the energy industry.
“I think it’s a misguided policy to
remove the incentives from renewable energy just as we need to transition into
clean energy,” EDC President and Chief Operating Officer Richard B. Tantoco
told reporters during the National Sustainability Summit for Millennials and
Gen Zs at the University of Asia and the Pacific over the weekend.
He said from an “energy and
sustainability standpoint” the proposed policy could put the company and the
entire industry at risk.
EDC produces 1,472 megawatts (MW) of
power from hydro, solar and wind resources, apart from its 1,200 MW of
geothermal capacity.
“We’re headed in the wrong
direction,” he said, adding that he does not mind being quoted on behalf of the
company, which was recovering from the devastation of Typhoon Urduja in
December last year.
Mr. Tantoco was referring to the
government’s so-called Trabaho bill, the second phase of its tax reform program
that seeks to lower the corporate income tax.
The bill, the Department of Finance
(DoF) said, also corrects the country’s “convoluted” incentives scheme for businesses.
The proposed legislation has been approved by the House of Representatives on
third and final reading.
The DoF said the “pro-investment”
tax reform package would ensure that fiscal incentives remain but
performance-based or must commit to meeting targets such as job creation,
export sales, countryside growth and research and development.
“If you remove the fiscal
incentives, the impact on renewable energy is like you’re taxing it 10 times of
coal,” Mr. Tantoco said, adding that renewables are what the country needs to
begin its transition from coal-fired power plants.
He described the current times as a
period of uncertainty for energy companies.
“It’s a major uncertainty because
people are looking at their numbers and then they don’t know whether they’re
gonna have 10% income tax or 30[%]. They don’t know if they’re gonna be able to
import without duties or with duties. [What] they’re gonna have in the meantime
is insecurity,” he said.
“Definitely today with the specter
of the bill hanging over the industry’s head, we will see investments slow
down,” he added.
The DoF said incentives should also
be time-bound, thus tax perks are not granted indefinitely. It said the perks
should also be targeted so that only industries that provide multiplier benefits
to the economy will be given incentives. It also wants incentives to be
transparent to ensure recipients report the perks they get to the government
and the public.
EDC Chief Executive Officer Federico
R. Lopez said the company had voiced out its views on the removal of the
incentives, and that the DoF had been listening.
Mr. Lopez, who is also CEO of First
Philippine Holdings Corp., said locators in the holding firm’s industrial park
are on a wait-and-see mode ahead of the final outcome of the proposed tax
reform. — Victor V. Saulon
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