Despite increasing number of court filings and long years of dispute resolution, the independent power producers (IPPs) are still in search of a “compromise arrangement” that will resolve their concerns over real property tax (RPT) payments.

In a briefing with reporters, Philippine Independent Power Producer Association Inc. (PIPPA) president Ernesto B. Pantangco noted that because of the tax mess, some IPPs are confronted with dangers of not having their business permits renewed as local government units (LGUs) are turning more aggressive at collecting exorbitant tax claims from them.

To date, he noted that total RPT payments due and demandable from IPPs already swelled to P64 billion, including penalties and surcharges. The principal amount should have only been at P19 billion had the assessment rate provided under the Local Government Code (LGC) for government-owned and -controlled corporations (GOCCs), and in reference to the Build-Operate-Transfer (BOT) contracts, been strictly followed.

“The RPT issue continues to be unresolved. We’re urgently requesting the DOF (Department of Finance) with various affected groups (like IPPs and LGUs) to try to arrive at a mutually acceptable solution to this issue,” he stressed.

He hinted that even the Joint Foreign Chambers, to which some of the foreign IPPs are affiliated with, is already joining the bandwagon to raise the issue with relevant government agencies.

“We agreed that the issue needs urgent resolution,” he stressed, adding that the foreign business chambers are now preparing their own position paper on the matter.

Pantangco added that talks and negotiations are being carried out with both the National Power Corporation (NPC) and its successor-company Power Sector Assets and Liabilities Management Corporation (PSALM) in drawing up a ‘compromise arrangement’ that will thrive mutually beneficial to parties concerned.

“I have to consult with the industry which could be an acceptable compromise,” the PIPPA chief noted.

For the IPPs in contract with GOCCs, like NPC or the National Irrigation Administration (NIA) in the case of hydro plants, the tax assessment rate should have been at 10-percent of the assets’ value, as compared to the up-to-80 percent levied on the private IPPs.