Bureau of Local Government Finance Opinion

March 26, 2012 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION Mr. Eulogio S. Frias Municipal Assessor Basista, Pangasinan Sir : This has reference to your letter dated August 3, 2010 seeking opinion on the propriety of the assessment made for real property tax purposes by that office on the electric post, cables, wires and transformers of CENTRAL PANGASINAN ELECTRIC COOPERATIVE, INC. (CENPELCO). The said electric cooperative, which is registered with NEA under PD 269, covers the towns of Central Pangasinan. Based on the documents presented it could be inferred that the said assessment was challenged by CENPELCO citing as their basis the decision of the Supreme Court in the case entitled " Board of Assessment Appeals, et al. vs. Manila Electric Corporation , 10 SCRA 68", wherein the said court held that: aITECD "The term "pole" refers to an upright standard to the top of which something is affixed or by which something is affixed or by which something is supported, and includes a steel tower of an electric company, like the MERALCO; they do not constitute real property for purposes of real property tax". Your office, despite the arguments raised by CENPELCO stood firm on the assessment it made citing as one of its basis the EN BANC decision of the Supreme Court in the case entitled " PHILRECA, et al. vs. The Secretary, DILG, et al. (G.R. No. 143076)". The Bureau likewise, in a similar case had, on June 8, 2004 (copy enclosed) rendered an opinion pertaining to the taxability of electric posts and transformers of electric cooperatives, the last paragraph of which states that: "With regard to your query as to whether electric post and transformers of electric cooperatives registered with NEA under PD No. 269 which are actually, directly and exclusively used in the transmission and generation of electric power are subject to real property tax, this Bureau opines that electric post and transformers are taxable in view of the aforementioned EN BANC Decision of the Supreme Court in PHILRECA Case". WHEREFORE, premises considered this Bureau hereby reiterates its stand as regards the taxability of electric post and transformers of electric cooperatives. Hence, we find the action taken made by your office in assessing the subject real properties of CEMPELCO, in order. Very truly yours, (SGD.) SALVADOR M. DEL CASTILLO OIC-Executive Director