PIMENTEL BACKS PROPOSAL TO REDUCE TAX ON INDIGENOUS ENERGY
Minority Leader Aquilino Pimentel Jr. (PDP-Laban) today backed a proposal in
the Senate to reduce the government royalty and other taxes on indigenous,
renewable sources of energy in order to relieve households and industries
from excessive power cost.
“The utilization of indigenous energy sources in the country like natural
gas and geothermal power, which are extensively being used to generate
electricity, would be really meaningful to the Filipinos if this will
translate into lower power cost” Pimentel said.
He said the significant reduction of power rates in the Philippines,
acknowledged to be the second highest in East Asia after Japan, should be
part of the administration’s economic stimulus package to help the ordinary
Filipinos tide over their present difficulties, as well as to rescue
distressed industries and prevent job losses in the wake of the global
financial crash.
The minority leader urged the Arroyo administration not to block the
legislative moves to cut taxes on indigenous energy sources as he echoed the
people’s frustration over the steadily rising power rates contrary to the
expectations that the enactment of the Electric Power Industry Reform Act of
200l will bring down electricity cost.
“The Epira was aimed at reducing power rates, but this has not happened. On
the contrary, electricity cost keeps on rising, adding to the financial
burden of poor families and making our domestic industries less and less
competitive. It has also compelled foreign investors to bypass the
Philippines as an investment destination,” Pimentel said.
In compliance with Epira, the government has privatized the generating
assets of the National Power Corporation, and sold the National Transmission
Corp. to a newly-organized business consortium.
However, Pimentel said the government went overboard by selling the
highly-profitable Transco to the National Grid of the Philippines, a joint
venture between three Filipino firms and the State Grid of China, a publicly
listed firm in Hong Kong.
“I think this is a subterfuge of the power distribution in the country. Why
are we allowing a company fully owned by a foreign power to operate the
country’s power transmission lines? I think, there is something terribly
wrong with the deal,” he said.
The minority leader said he has asked the Senate committee on energy to
review the privatization of Transco in the light of allegations that it was
grossly disadvantageous to the government.
Now being tackled by the Senate committee on energy and the committee on
ways and means is a bill authored by Senate President Juan Ponce Enrile to
limit to three percent the tax on the gross revenues of companies engaged in
the development and production of indigenous energy sources which are being
used for generating power. The bill aims to exempt these companies from
value added tax and income tax.
One of the purposes of the measure is to remedy a lopsided situation wherein
the power generated from natural gas from the Malampaya wells off Palawan is
levied a rate of royalty much higher (Pl.48 per kilowatt hour) than the rate
imposed on other fuels
Pimentel said the unusually huge royalty for locally-produced natural gas
also serves as a disincentive to companies that are being lured by the
government to engage in the exploration and development of indigenous energy
sources.
Date: April 22, 2009
Ref: Omeng Maglangit / (02) 5526733 |
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