Manila: The Department of Energy (DOE) and the Department of Finance (DOF) on Wednesday signed a joint memorandum circular (JMC) that will exempt eligible electric cooperatives (ECs) from local taxes, fees, and charges.

According to Philippines News Agency, the new JMC will grant ECs registered with the National Electrification Administration (NEA) or the Cooperative Development Authority local tax exemption upon compliance with financial and operational requirements. DOE Secretary Raphael Lotilla described the tax exemption as a significant milestone for qualified ECs, as it reduces financial burdens, allowing reinvestment into service improvements and achieving total electrification.

To qualify for the tax exemption, an EC must secure an annual Certificate of Compliance from NEA. ECs eligible for NEA’s certification must achieve at least a 75-percent rating on compliance parameters. These parameters include maintaining high collection efficiency, achieving a positive net worth, meeting system reliability
and system loss standards, conducting annual general membership assemblies and district elections as scheduled, implementing electrification projects for full customer connection, and submitting complete and timely reportorial requirements to NEA.

The NEA plans to issue guidelines on the issuance of the Certificate of Compliance 15 days from the effectivity of the JMC. However, all ECs are still required to pay administrative costs imposed by local government units as outlined in the JMC 2019-01, signed by the Department of the Interior and Local Government and the DOF. These costs include fees for business permits, mayor’s permits, barangay clearances, community tax certificates, and other charges such as water consumption, electricity, and toll fees.

Lotilla emphasized that by reducing these costs, ECs will be empowered to focus on expanding access to electricity, particularly in unserved and underserved areas, ensuring no Filipino household is left behind.