Poe: Maybe threat of tax hike will make NGCP improve its services

Senator Grace Poe on Wednesday warned the National Grid Corporation of the Philippines (NGCP) that its dismal performance is making lawmakers consider hiking its franchise tax and making it pay corporate income tax.

“Yung three percent franchise tax ng NGCP, pwede siguro nating taasan ‘yon. Yon ang isa sa mga pwede nating pag-aralan…’yung corporate income tax na rin. Malaking makukuha natin d’yang pondo,” Poe said during the Senate energy committee hearing.

(Maybe we can raise the NGCP's three-percent franchise tax. That's one thing we can study. The corporate income tax too. We would get a lot of funds from that.)

“Si Senator [Sherwin] Gatchalian naghahanap sa ways and means [committee] ng paraan para lahat ng proyekto ng gobyerno at subsidiya sa mga mahihirap mabigyan ng pondo…ang laki ng makukuha natin kung taasan natin ‘yung franchise tax at corporate income tax ng NGCP. Baka mapilitan sila na gandahan ang serbisyo nila kung marinig nila na may banta na ganyan,” she added.

(Senator Gatchalian at the ways and means committee is looking for ways so that all of the government's projects and subsidies for the poor are given funds...we would get a lot if we raise the NGCP's franchise tax and corporate income tax. Maybe they'll be forced to improve their services if they know they're threatened with that.)

The lawmaker gave the warning as the committee scrutinized the firm’s dividends while their expansion projects were delayed.

During the Kapihan sa Senado, Poe, chairman of the Senate public services committee which deliberates congressional franchises, said the tax incentives given to NGCP could be justifiable if they are providing satisfactory service.

“Kung sinabi sana na ang NGCP maayos ang serbisyo, maayos pagpapatakbo, siguro ‘di pa natin titignan ang binibigay natin sa kanilang parang subsidiya…dahil dapat naglalaan sila ng mas malaking expansion projects para lahat magkaroon ng maayos na kuryente. Eh di naman nila nabibigay yan,” Poe said.

(If it could be said that the NGCP's services are well-run, then we probably wouldn't be scrutinizing the subsidies we're giving it...because they should be providing expansion projects so that everybody can have proper electricity. But they're not providing that.)

“Kasi ‘di ba ‘yung mga korporasyon sa ating bansa napakataas ng corporate income tax na binabayad. I mean, binabaan na pero mataas pa rin. Bakit may exception sa NGCP? Binabayaran lang nila ang franchise tax nila, three percent, pinapasa pa sa atin ang ibang binabayaran nilang regulatory fees,” she added.

(Corporations in this country are paying high corporate income tax. I mean, it was lowered but it's still high. Why is NGCP the exception? They're only paying the franchise tax, three percent, and passing on to us the regulatory fees.)

Poe noted that even Senate energy committee chairman Raffy Tulfo supports the idea.

“Maraming iba’t-ibang opinyon d’yan. Sinabi ko lang 'yan bunga rin ng frustration sa serbisyo nila. So pag-aralan natin kung three percent ngayon kahit itaas man lang sa four percent or five percent, ang laki ng kinikita nilang dibidendo. Makakasama ba sa kanila 'yun?” she said.

(There are many opinions on this. I'm just saying this is borne out of frustration with its services. So let's study if we can raise the three percent, even if only to four or five percent, the dividends would be large. Would that be detrimental to them?)

During the hearing, it was disclosed that the NGCP has declared up to 101 percent dividends in the previous years.

It was also revealed that the NGCP is passing on the franchise tax to consumers—a matter that is being reviewed by the Energy Regulatory Commission.

ERC Chairperson Monalisa Dimalanta said the regulatory body has reviewed Congress's deliberations on the NGCP franchise and found that the franchise tax should not be passed on to the consumers.

“It’s clear there that the obligation was really going to rest on the franchise holder. So if there’s an inconsistency in how it is implemented we should address that because that’s not faithful to what was the consideration of Congress when that exemption was granted,” she said.

Dimalanta said she hopes that the ERC will resolve the matter immediately.

Earlier, Tulfo also called for the increase of taxes on the NGCP amid government plans to impose tax on junk food.

Under the law that gives franchise to the NGCP, the state grid company is obliged to pay a franchise tax equivalent to three percent of all gross receipts derived from its operations.

This is in lieu of income tax and all taxes, duties, fees, and charges established and collected by any authorities on its franchise. — BM, GMA Integrated News