Mirant pays P196-M tax to P’sinan

LINGAYEN, Pangasinan — After almost two years of legal wrangling with the provincial government, Mirant Philippines, which operates the coal-fired power plant in Sual town, has finally paid its real property tax amounting to more than P196 million.

Lawyer Virgilio Solis, provincial administrator, told The STAR that he brought home the bacon, so to speak, last Thursday when the Mirant management gave him a check for P196,479,023.26 representing its real property tax payment.

In a memorandum of agreement, Mirant said it found it "justifiable" to enter into an "interim arrangement" with the provincial government pending the final resolution of the case "to enable the province to immediately collect the taxes urgently required to fund its own projects and the projects of the local government units under it."

For its part, Mirant said it wanted "to avoid further inconvenience and possible disruption" of its operations and "forestall the deterioration of its relations with the province."

The tax payment will be shared accordingly by the provincial government, the municipal government of Sual and the barangay of Pangascasan where the Mirant power plant is located.

Based on a 1992 tax ordinance, one-half of the total amount (P98,239,511) will go to the Special Education Fund to be divided between the provincial school board and the municipal school board of Sual.

The other half, meanwhile, will be divided among the province (35 percent or P34,383,829), the Sual municipal government (40 percent or P39,295,804), and Barangay Pangascasan (25 percent or P24,559,877).

The P34-million share of the provincial government will go to the General Fund to be appropriated by the provincial board through a supplemental budget.

On Sept. 10, 2003, the Sual treasurer, as the province’s collection agent, and the provincial deputy treasurer issued to Mirant a formal demand for the payment of real property taxes for the second quarter of 2003 amounting to P51,598,511.46.

On Oct. 16, 2003, the National Power Corp. (Napocor) filed a petition for exemption from real property tax with the local board of assessment appeals (LBAA).

This, however, was dismissed on April 15, 2004. On May 21, 2004, the Napocor appealed the LBAA decision to the Central Board of Assessment Appeals.

Mirant and the Napocor filed a motion to dismiss the civil case on the grounds of failure to state a cause of action and litis pendencia, among other arguments. This motion is pending resolution by the regional trial court.

In a demand letter dated June 7, 2004, the province required Mirant to pay P134,760,512.40, representing its real property tax from the second quarter of 2003 up to 2004.

In a second demand letter dated Oct. 12, 2004, the Sual treasurer required Mirant to settle its real property tax amounting to P146,176,507.33 based on the Sept. 21, 2004 notice of delinquency.

Mirant referred both demand letters to the Napocor, arguing that the state-run firm is the beneficial owner of the power plant and that it is merely a financier-contractor.