Malacañang on Friday issued an executive order reducing real property taxes and penalties assessed on power generation facilities of independent power producers under the build-operate-transfer contracts.
Executive Order 88, which was signed Tuesday, covered all liabilities for real property tax, including any special levies accruing to the Special Education Fund for calendar year 2018, on property, machinery and equipment actually used by IPPs for the production of electricity under a BOT scheme and similar contracts.
These contracts include power purchase, energy conversion or other contractual deals with government- owned and controlled corporations which were assessed by entities authorized to impose real property tax for all years up to 2018 such as local government units.
“They are hereby reduced to an amount equivalent to the due computed tax based on an assessment level of 15 percent of the fair market value of the said property, machinery and equipment depreciated at the rate of two percent per annum, less any amounts already paid by the IPPs,” the EO read.
"All interests on such deficiency real property tax liabilities are also hereby condoned and concerned IPPs are relieved from payment,” it added.
The President can condone or reduce the real property tax and interest for any year in any province, city or municipality within the Metropolitan Manila area when public interest requires, according to the order.