MOA to set­tle firm’s tax is­sues

Mindanao Times - - BUSINESS - BY JULIANNE A. SUAREZ

THE city coun­cil passed on first read­ing a pro­posal for the craft­ing of a mem­o­ran­dum of agree­ment (MOA) that will set­tle the is­sues of how to di­vide taxes of the Therma South Inc. be­tween the city gov­ern­ment and the gov­ern­ment of Sta. Cruz, Davao del Sur.

The pro­posal was re­ferred to the com­mit­tee on fi­nance, ways and means, and ap­pro­pri­a­tions chaired by Coun­cilor Danilo Dayanghi­rang last Tues­day dur­ing the reg­u­lar ses­sion.

This de­vel­oped as the com­pany, a sub­sidiary of the Aboitiz Power Corp., said in a state­ment sent to TIMES that “the lo­cal gov­ern­ment units of Davao City and Sta. Cruz have agreed on a 60%40% shar­ing of the 70% of Therma South, Inc’s (TSI) lo­cal busi­ness tax, re­spec­tively.”

“The re­main­ing 30% will au­to­mat­i­cally go to Davao City be­ing the prin­ci­pal place of busi­ness of TSI,” it added.

The mu­nic­i­pal­ity gov­ern­ment of Sta. Cruz al­ready en­acted an or­di­nance spec­i­fy­ing that it will en­ter into a MOA with the Davao City and TSI will fi­nally come up with a clear ex­tent of the com­pany’s obli­ga­tions to the LGUs.

Based on Sec­tion 143 of the Lo­cal Gov­ern­ment Code, 30% of all sales recorded in the prin­ci­pal of­fice shall be tax­able by the city or mu­nic­i­pal­ity where the prin­ci­pal of­fice is lo­cated; and sev­enty per­cent (70%) of all sales recorded-in the prin­ci­pal of­fice shall be tax­able by the city or mu­nic­i­pal­ity where the fac­tory, project of­fice, plant, or plan­ta­tion is lo­cated.

TSI’s prin­ci­pal of­fice is lo­cated in the City of Davao, while its coal plant is lo­cated partly in the City of Davao and partly in the Mu­nic­i­pal­ity of Sta. Cruz, Davao del Sur.

“The MOA shall con­tain, among oth­ers, the sales al­lo­ca­tion and col­lec­tion shar­ing and the con­di­tion that every three years from the ef­fec­tiv­ity of the MOA, any of the City of Davao and the Mu­nic­i­pal­ity of Sta. Cruz may re­quest for the rene­go­ti­a­tion of the terms thereof, pro­vided that un­til and un­less a new MOA is en­tered into by the

par­ties, the ex­e­cuted MOA and the col­lec­tion shar­ing therein agreed shall con­tinue to be in ef­fect,” the Sta. Cruz or­di­nance said. TSI started full com­mer­cial op­er­a­tions in Fe­bru­ary 2016 with about 20 elec­tric co­op­er­a­tives and pri­vate dis­tri­bu­tion util­i­ties in Min­danao get­ting sup­ply from its 300-megawatt baseload power plant.

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