Two party-list lawmakers on Thursday warned Congress against granting a “super legislative franchise” that is being proposed to extend a windfall of tax and non-tax incentives to a power company,
1-PACMAN Party-list Rep. Mikee Romero and Eric Pineda was referring to House Bills 8013 and 8015 that is currently deliberated at the House of Representatives’ committee on legislative franchise, chaired by Palawan Rep. Franz Alvarez.
In a joint statement, they said the proposal for a legislative franchise for Solar Para sa Bayan Corp. should be studied carefully in the wake of government’s bid to withdraw the various tax incentives extended to corporations.
They added that HBs 8013 and 8015, once passed, will defeat the Duterte administration’s bid to recall the tax incentives various laws have given investors and corporations as part of Tax Reform for Attracting Better and Higher Quality Opportunities (Trabaho) bill.
HB 8013 is authored by Bohol Rep. Arthur Yap; while HB 8015 is penned by Compostela Valley Rep. Maria Carmen Zamora.
Romero, a member of the House Committee on Legislative Franchise, said the twin measures, as proposed, will allow SPBC to enjoy exemption from a wide range of national government taxes and duties, such as the 12 percent value-added tax on sales and 32 percent corporate income tax, on top of exemption from local government taxes and fees.
HB 8013 is expected to be approved by the House legislative franchise committee soon after having deliberated in two hearings; while HB 8015 is still currently being deliberated.
Romero said, “the perks and privileges granted by the proposed legislative franchise can be unfair to other players in the renewable energy industry.” The SPBC is being given a “privileged status” over the estimated 100 renewable energy companies operating in the country at present, Romero said.
“The bill will give undue advantages to this group. This is a master franchising scheme of the whole solar power industry,” warned Romero, adding that the proposed franchise, in effect, will allow SPBC to operate in other franchise areas as a mini-grid system that can operate either independent from or “in conjunction with transmission or distribution systems or other mini-grid systems.”
Once enacted, the SPBC shall also be extended the benefit of practically venturing in all types of power-related businesses, ranging from power generation, distribution, and transmission, in all parts of the country, including in areas franchised to existing distribution utilities and electric cooperatives.
The allowed power-related businesses include distributable power technologies (DPTs), mini-grid systems, as well as ancillary and related businesses, Romero said.
In an industry with so many regulations, Pineda said the SPBC will likewise enjoy a package of non-tax incentives that will include exemption from getting an Energy Regulatory Commission (ERC) certificate of completion (COC) for its power-related projects.
Under existing ERC rules, no power company can operate a power plant without first getting a COC for the plant, he added.