DOJ Opinion No. 037, s. 1990

DOJ OPINION NO. 037 , s. 1990 March 2, 1990 Mr. Romulo D. San Juan Assistant Secretary Department of Environment and National Resources Visayas Avenue, Diliman Quezon City Sir : This has reference to your request for opinion on the claim of the National Power Corporation ("NAPOCOR") for exemption from the payment of permit fees imposed by that Department pursuant to its Forestry Administrative Order No. 8-3, series of 1941. cdll The NAPOCOR alleges that it is exempt from payment of fees for the operation of air/water pollution sources and control facilities for its power plants on the basis of its charter (R.A. No. 6395, as amended). On the other hand, you contend that the tax exemption in said charter "refers only to [the] government's imposition on all petroleum products used by the Corporation and those occasioned by court or administrative proceedings." The pertinent provision in the NAPOCOR charter reads: "Sec. 13. Non-profit Character of the Corporation; Exemption from All taxes, Duties, Fees, Imposts and Other Charges by the Government and Government Instrumentalities . The Corporation shall be non-profit and shall devote all its returns from its capital investments as well as excess revenues from its operation, for expansion. To enable the Corporation to pay its indebtedness and obligations and in furtherance and effective implementation of the policy enunciated in Section One of this Act, the Corporation, including its subsidiaries, is hereby declared exempt from the payment of all forms of taxes, duties, fees, imposts as well as costs and service fees including filing fees, appeal bonds, supersedeas bonds, in any court or administrative proceedings ." (Emphasis supplied) The broad and all-encompassing character of the foregoing tax-exemption clause has been interpreted consistently in previous opinions of this Department. Thus, it was held in Opinion No. 106, s. 1954 that: "Tax exemption are undoubtedly to be construed strictly but not so grudgingly as to defeat their purpose. It is common knowledge that many impositions taxpayers have to pay are in the nature of indirect taxes. To limit the exemption granted the National Power Corporation to direct taxes notwithstanding the general and broad language of the statute will be to thwart the legislative intention in giving exemption from all forms of taxes and impositions without distinguishing between those that are direct and those that are not." Then also, in Opinion No. 36, s. 1984, it was ruled that the NAPOCOR is exempt from the payment of the locational clearance fees imposed by the then Human Settlements Regulatory Commission for the reason that "the intent is clear to relieve the NAPOCOR of the burden of any imposition by the government or any of its agencies and instrumentalities, whether in the form of taxes and duties for revenue purposes, or of fees for services rendered." Finally, in Opinion No. 144, s. 1985, it was observed that the abovequoted provision of law contemplates the "broadest tax exemption" intended by the lawmaking authority. prcd In the light of the abovestated rulings of this Office on the scope of the NAPOCOR's tax immunity, we hold that said entity is exempt from the payment of the permit fees imposed by the Department in connection with its operation of air/water pollution sources and control facilities for its power plants. Very truly yours, (SGD.) FRANKLIN M. DRILON Secretary cc: Mr. Marcelino C. Ilao Vice-President - General Counsel National Power Corporation