SN Aboitiz Power, Benguet settle tax dispute


The Benguet provincial government has agreed to pay P157.7 million equal to three years of tax benefits to the host communities of SN Aboitiz Power Group (SNAP) as part of the resolution of their real property tax (RPT) dispute.

Benguet governor Crescencio Pacalso and SNAP COO Joseph Yu signed a compromise agreement over the RPT dispute that is acceptable and fair to both parties.

RPT is the tax on real property charged by the local government unit.

“[W]hat is more important is our relationship with our partners. That is why SNAP has come to a decision not to demand the refund of the excess of the taxes we have paid, so our host communities can utilize the full amount of P157.7 million for their community development projects” Yu said.

A 2010 ordinance lowered the tax rate of structures, halving it to 40 percent. During its implementation in 2014, however, the Bokod and Itogon municipalities imposed the higher tax rate of 80 percent to SNAP properties after identifying them as machinery.

Even as SNAP’s appeal to the Local Board of Assessment Appeals was pending, the company paid the assessed amount “under protest” for two years. However, it being under protest meant Bokod and Itogon could only utilize 50 percent of the amount while the other half went into a trust.

“It also recognized SNAP’s legal position that the properties in question are ‘structures’ and not machinery, making them eligible for the lower tax rate of 40 percent,” the agreement said.

“We consider SNAP as part of our constituents and we make it a point that the people, community and company in our constituency are in good terms. This agreement will be able to help communities especially now that we are on the verge of rehabilitation after Typhoons Karen and Lawin,” Pacalso said.

He added that the amount will help in the rehabilitation efforts after the two typhoons that hit northern Luzon this month.

SNAP is a joint venture between SN Power of Norway and AboitizPower. It owns and operates the 105-megawatt Ambuklao hydroelectric power plant in Bokod and the 140-megawatt Binga in Itogon.