Withdrawal of Tax and Duty Exemption Privilege of Electric Cooperative

December 19, 1988 BIR RULING NO. 584-88 117 (a) 469-88 584-88 S i r : In reply to your letter dated October 12, 1988 inquiring as to whether FIRB Resolution No. 24-87 restoring the tax and duty exemption privilege of electric cooperatives is still effective, please be informed that the tax exemption privilege of electric cooperatives has been withdrawn by Executive Order No. 93 effective March 10, 1987. However, said withdrawal was suspended until June 30, 1987, pursuant to Memorandum Order No. 65 dated January 21, 1987 of the President. On the other hand, while FIRB Resolution No. 24-87 restored the tax exemption privilege of electric cooperatives effective July 1, 1987, the Secretary of Justice rendered an opinion on August 6, 1987 (Opinion No. 77, S. of 1987) declaring as unconstitutional the power of FIRB to restore the tax exemption privileges withdrawn by Executive Order No. 93. In other words, said restoration being unconstitutional and therefore, void, the tax exemption privileges of electric cooperatives expired as of June 30, 1987. (BIR Ruling No. 369-88) Such being the case, effective July 1, 1987, said electric cooperatives became subject to the 2% franchise tax imposed by then Section 227 of the Tax Code which provision is now renumbered as Section 117 by Executive Order No. 273. cdt Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner