The Court of Tax Appeals en banc has turned down a suit filed by the Davao del Sur provincial government questioning a ruling by the Central Board of Assessment Appeals (CBAA) over tax breaks granted to a renewable energy (RE) firm.
In a 19-page decision penned by Associate Justice Juanito C. Castañeda Jr., the CTA denied “for lack of merit” the petition filed by the provincial treasurer of Davao del Sur and the municipal treasurer of Sta. Cruz, Davao Del Sur to pursue local taxes imposed on hydro-electric power plant operator, Hedcor Sibulan, Inc. (HSI).
The CTA affirmed the decision dated Oct. 18, 2019 of the CBAA which said HSI is only liable for realty taxes at the maximum rate of 1.5 percent to the original cost under Republic Act 9513 also known as the Renewable Energy Act of 2008 or RE Law, an incentive eyed to encourage investment into renewable energy.
The firm had paid under protest more than PHP9 million taxes in 2015 to the Davao del Sur local government units (LGU) but said PHP2.27 million should be granted refund or tax credit because this amount was collected in excess of the maximum imposable realty tax rate of 1.5 percent to registered RE developers under the RE Law.
On Oct. 19, 2020, the CBAA held that HSI is indeed liable for realty taxes only up to a maximum of 1.5 percent as provided for under the RE Law and granted HSI’s claim for refund prompting the LGUs to elevate the case to the CTA en banc.
The LGU claims that the RE Law does not prevent it from imposing an additional 1 percent special education fund (SEF) levy allowed under the Local Government Code, aside from the realty taxes of a maximum rate of 1.5 percent.
In turning down the LGUs suit, the CTA noted that among other things the RE Law was enacted on Dec. 16, 2008 while the Local Government Code on Jan. 1, 1992.
“The RE Law, being the most recent legislation is viewed by the Court an express and real intention on the part of Congress to limit the LGU’s delegated taxing power on renewable energy resources within their jurisdiction,” the CTA said.
Source: Philippines News Agency