Bureau of Local Government Finance Opinion

October 2, 2014 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION Hon. Jeremias N. Paul, Jr. Undersecretary Domestic Finance Group Department of Finance (DOF) Manila Sir : This refers to the Memorandum requesting comments on the House Bill No. 4751, "AN ACT AMENDING THE TAX PROVISIONS OF REPUBLIC ACT NO. 9511 ENTITLED 'AN ACT GRANTING THE NATIONAL GRID CORPORATION OF THE PHILIPPINES A FRANCHISE TO ENGAGE IN THE BUSINESS OF CONVEYING OR TRANSMITTING ELECTRICITY THROUGH HIGH VOLTAGE BACK-BONE SYSTEM OF INTERCONNECTED TRANSMISSION LINES, SUBSTATIONS AND RELATED FACILITIES, AND FOR OTHER PURPOSES.'" In this regard, please be informed that the BLGF, has issued Memorandum Circular No. 48-2012, dated June 22, 2012, (copy attached) with the following guidelines: 1. NGCP is subject to real property tax on their real estate, buildings, machinery and equipment and personal properties; 2. The Real Properties of NGCP shall be classified, valued and assessed as Industrial; 3. The Assessment Level (AL) for Land, Buildings and other Structures provided under Section 218 (a) (b) or that AL enacted under enabling Ordinance by the Local Sanggunian, shall apply; 4. The machinery and equipment of NGCP used actually, directly and exclusively in the generation and transmission of electric power shall have an Assessment Level (AL) of 80% or that AL which was fixed under an enabling Ordinance enacted by the local Sanggunian, pursuant to Section 218 (c) of the LGC; 5. The machinery and equipment of NGCP used actually, directly and exclusively in the generation and transmission of electric power which ceased operations shall no longer be assessed, and should be transferred from the taxable roll to exempt roll of real properties. The BLGF, therefore maintains its stand on the taxability of NGCP's real properties. aScITE Very truly yours, (SGD.) SALVADOR M. DEL CASTILLO OIC-Executive Director