MANILA, Philippines – The National Grid Corp. of the Philippines (NGCP), the country’s power grid operator, maintained that it is exempt from income tax but stressed that it dutifully pays its franchise taxes to the government.
NGCP, a privately owned transmission company, said that its tax-exempt privilege is provided under Republic Act 9511, the law that granted NGCP a 50-year franchise to operate the grid.
The grid operator made the clarification after the Department of Finance (DOF) published a Tax Watch print ad stating that only 39 of the top 100 corporations ranked by the Securities and Exchange Commission (SEC), the corporate regulator, landed on the Bureau of Internal Revenue’s (BIR) list of 500 top corporate/non-individual taxpayers.
NGCP is in the SEC’s list of top 100 corporations, occupying the 25th spot, based on revenues. On the other hand, BIR’s list, which was based on income tax returns, did not include the grid operator.
NGCP spokesperson Cynthia Perez-Alabanza said that the company pays franchise tax in lieu of income tax.
“NGCP’s franchise granted through Republic Act 9511 mandates that it pay a franchise tax equivalent to three percent of all gross receipts, ‘in lieu of income tax and any and all taxes, duties, fees and charges of any kind, nature of description levied, established or collected by any local or national authority on its franchise, rights, privileges, receipts, revenues and profits, and on properties used in connection with its franchise,” she said.
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“NGCP dutifully pays any and all taxes due from it to the government. This is another way we contribute to nation-building,” Alabanza added.
The company, which is 40 percent owned by the State Grid Corp. of China, has a 25-year concession and a 50-year franchise to operate the country’s power grid.
NGCP is a privately owned corporation in charge of operating, maintaining, and developing the country’s power grid. It transmits high-voltage electricity through “power superhighways” that include the interconnected system of transmission lines, towers, substations, and related assets.
