After Capitol's P192M assessment: NGCP warns of "blackout" over taxes

CEBU, Philippines - The National Grid Corporation of the Philippines (NGCP) yesterday filed a petition for declaratory relief against the Province of Cebu questioning its P192 million tax assessment.

NGCP prayed for the cancellation of the tax declarations of its submarine cables, transmission lines and other machinery claiming that these were erroneously done.

The power transmission company likewise asked for a 72 hour temporary restraining order and subsequently a preliminary and permanent injunction to prevent the provincial government from collecting the alleged tax due and from levying its properties.

According to NGCP, subjecting the transmission lines to public auction would cause them and the general public irreparable damage. NGCP warned of a possible "power blackout" in Cebu should the plan of the provincial government to auction the transmission lines will not be stopped.

NGCP said it is also in danger of facing sanctions from the Energy Regulatory Commission as it will fail to comply with the regulatory requirements as a result of the auction.

"There is an extreme urgency for the issuance of a TRO and a writ of preliminary injunction considering that the sale at public auction is already underway and could happen anytime," NGCP said.

Aside from the provincial government, also named respondents of the case are provincial treasurer Roy Salubre; former provincial assessor Anthony Sususco; and the National Transmission Corporation.

NGCP impleaded TransCo in the case despite its claim that the latter owns the transmission lines that the Capitol wants to tax for being an unwilling co-plaintiff.

NGCP questioned the Capitol's tax assessment against them claiming that the transmission lines are not theirs but of their partner Transco, which is a government owned and controlled corporation.

The complainant contended that under the law government corporations are exempted from paying taxes.

"The properties involved are exempted from real property tax by virtue of Section 9 of RA 9511 and Section 234 (c) of the LGC since the properties are owned by TransCo and are actually, directly and exclusively used for the transmission of electric power," the NGCP petition reads.

NGCP and Transco have a concession agreement to transmit electricity from its sources.

"TransCo as provided in the concession agreement is the owner of the transmission assets managed and operated by NGCP as concessionaire," the petition reads further.

On March 15, 2012 NGCP officials received a letter from the provincial treasurer inviting them to attend a meeting on March 21 to discuss their franchise and real property tax delinquency.

NGCP officials said it was during the meeting that they were informed of the P96 million assessment covering tax declaration 24085 covering the period from 2009 to 2012 in Talisay, Daanbantayan.

 "NGCP has no idea as to what properties were involved as it never received any Notice of Assessment, Tax Declaration, nor a Tax Bill for the properties allegedly covered," according to the petition.

NGCP however admitted receiving the notice of assessment covering tax declaration 14737 on August 8, 2011 and filed a petition before the Local Board of Assessment Appeals (LBAA) questioning the assessment which was then P96 million.

Despite the pending appeal, the treasurer issued another notice of tax delinquency on December last year.

Provincial legal counsel Marino Martinquilla said they will proceed with the auction on July 2 unless they receive a restraining order from the court.

Martinquilla insisted that the NGCP's assets like wires and poles are taxable. Martinquilla said they have already received a copy of the petition and will answer it within the period allowed by the court.

"We believe that we have a strong case here," Martinquilla said.

— with Niña G. Sumacot/FPL (FREEMAN)