South Cotabato electric coop settles P73-M tax arrears

By Danilo E. Doguiles

Tuesday 3rd of July 2012

KORONADAL CITY, South Cotabato July 3 (PIA) -- The provincial government of South Cotabato and South Cotabato 1 Electric Cooperative (Socoteco 1) has signed a compromise deal that paves the way for the power distribution utility to pay its unpaid taxes amounting to P73 million.

Alfredo Dumanig, chief of the Land Tax Division of the Provincial Treasurer’s Office said, the electric cooperative has agreed to pay its real property tax (RPT) arrearages after months of negotiation.

In December last year, talks between the local government unit and the cooperative began for the possibility of condoning accumulated penalties and surcharges from its RPT provided the former makes one-time payment of the principal tax due, which was at that time was computed at P41,271,295.48.

However, during the ensuing deliberations on the matter, the Sangguniang Panlalawigan found that Section 178 of the Local Government Code, which sets policy on condonation or reduction of RPT does not apply to the cooperative’s proposal.

This resulted in months of discussion on the adjustment of the proposed agreement, culminating with the signing of the final agreement Thursday, with Socoteco promising to pay the full arrearages.

Following the signing of the deal, Socoteco paid initial payment of P6,557,960, Dumanig said.

“Beginning August the electric cooperative will be paying P3,170,054 monthly until July 2013,” he said. These payments should cover the principal tax due of about P44.5 million.

The settlement agreement also allows the electric cooperative to pay P1.9 million annually for a 15-year period to pay the P28.5-million surcharges and penalties.

In an earlier interview, Board Member Ervin Luntao, chairman of the SP’s ways and means committee, said the agreement could help cushion the provincial LGU from the effects of the 40-percent reduction of the internal revenue allotment (IRA).

This year, over P36 million was cut from the province’s IRA. A notice from the Department of Budget and Management indicated that in 2012 the province’s allotment was reduced to P751 million from P787.8 million in 2011.

By the end of this year, the provincial government could collect additional revenue of P22.4 million from Socoteco 1.

Meanwhile, Gov. Arthur Y. Pingoy Jr. said residents of province could expect proceeds could mean more services.

“Once the principal amount is collected, about P10 million will go to the Special Education Fund,” Gov. Pingoy cited. “This could pay for the construction of several classrooms.” (DEDoguiles/PIA 12)