Tuesday, December 3, 2013

BIR CANCELS TAX EXEMPTION OF NEA'S ELECTRIC CO-OPS?





This is the big question.


This is following the publication of the news about the issuance of BIR Rev. Memo. Circular No. 74-2013.  According to the published news, this withdrew the tax exemption privileges of NEA-registered electric cooperatives.


We visited the BIR website (www.bir.gov.ph), prior to posting this blog entry (Dec. 4, 2013) and the copy of the said Circular is not yet uploaded  in the website.


Not seeing such Circular, we wish to quote instead from the published news report ("Power Rate Hike Looms:  Oil Companies Implement Hefty Fuel Price Hike," by Jun Ramirez, et al, Mla. Bulletin, pp. 1 & 6, Dec. 4, 2013):


"...Power rates in provinces serviced by ELECTRIC COOPERATIVES (ECs) are expected to rise after the Bureau of Internal Revenue withdrew their tax exemption privileges...


...The possibility of power rate hike surfaced after BIR Commissioner Kim S. Henares signed yesterday Revenue Memorandum Circular No. 74-2013 that explains the tax liabilities of ECs registered with the National Electrification Administration (NEA) relative to BIR Ruling No. 398-2013 issued early this month...


...Henares came out with the Circular in response to the query of Marinduque Electric Cooperative (Marelco) seeking tax exemption as a non-stock and non-profit organization....


...Marelco invoked the old RMC 72-3003 (sic) implementing Section 39 of Presidential Decree No. 269 promoting and encouraging the development of electric services in the countrysides...


...But Henares said the decree was cancelled when then Pres. Corazon C. Aquino issued Executive Order No. 93 in December l987...

...."Accordingly, this office opines that Marelco's income from its electric service operation is subject to income tax beginning January 1, 2004.  However, Marelco is subject to all other national government taxes and fees," Henares said...(end of quotes).


So, there. What about electric cooperatives which had been registered with the Cooperative Development Authority, instead of NEA?  Are they also affected by the BIR Circular?  Let's wait to see the copy of the aforecited Circular.  (END).

 

No comments:

Related Posts with Thumbnails