ENERGY CENTER, Taguig City — The Department of Energy (DoE) and Department of Finance (DoF) has signed a joint memorandum circular exempting all electric cooperatives (ECs) in the country from local taxes, fees and charges imposed by local government units (LGUs) upon compliance with financial and operational standards.

Under the said memorandum circular, ECs are mandated to secure an annual certificate of compliance from the National Electrification Administration (NEA), demonstrating their adherence to the prescribed parameters.

According to energy secretary Raphael Lotilla, he believes the local tax exemption would help ECs to focus on “expanding access to electricity, especially in unserved and underserved areas, ensuring no Filipino household is left behind.”

“This (initiative) is a significant milestone for our qualified ECs, as it directly translates to reduced financial burdens that can be reinvested into improving services and achieving 100 percent total electrification,” Lotilla enthused.

Local taxes refer to enforced contributions imposed by LGUs in provinces, cities, municipalities and towns through an ordinance, such as real property taxes, business tax, franchise tax and tax on the transfer of real property ownership.

To qualify for the certification, ECs must achieve a rating of at least 75 percent based on NEA’s compliance parameters which include high collection efficiency, a positive net worth, meeting system reliability and system loss standards, and complete and timely submission of reportorial requirements.

However, all ECs are still subject to regulated and reasonable local administrative costs, including fees for business permits, mayor’s permits, barangay clearances, community tax certificates and other charges.

Within 15 days from the effectivity of the joint circular, the NEA is expected to release the guidelines governing its issuance of certificates of compliance.