Electric Coops Decry Double Taxation

Manila Bulletin, May 26, 2005 | Go to article overview

Electric Coops Decry Double Taxation


The countrys 119 electric cooperatives are up in arms against the newly signed Expanded Value Added Tax (VAT) law as this will worsen the burden of their customers, with the double scheme of taxation now imposed on them.

Aside from VAT, the electric cooperatives are also mandated to pay franchise tax; which they considered as "patently unfair measure" meant to pummel their continued operations.

In the VAT, the franchise tax for large distribution utilities has already been scrapped in lieu of VAT but the electric cooperatives will be subjected to both VAT and franchise taxes.

"This is patently unfair and unjust. Such taxes constitute an added passon charge to the coop consumers," the party list group Association of Philippine Electric Cooperatives (APEC) has stressed.

The group has noted that despite the fact that it is serving some 6.6 million customers nationwide, their concerns are normally relegated to the background in the sphere of the governments policy crafting; and the VAT law is just one of these.

In their course of business, electric cooperatives usually have a total circuit kilometer of lines of 238,638 km, mostly in far flung rural areas with few customers; as compared to the shorter lines being installed by distribution utilities in highly viable areas, like Metro Manila and other metropolis. …

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