SNAP, Benguet settle real property tax dispute

SN Aboitiz Power Group (SNAP) and the Benguet provincial government have settled a real property tax (RPT) dispute, with the latter paying P157.7 million equivalent to three years of tax benefits to host communities.

In a disclosure yesterday, Aboitiz Power Corp. said its affiliate SNAP inked a compromise agreement with Benguet province over a RPT dispute that reached P157.7 million— representing three years of tax benefits to the municipalities of Bokod and Itogon and for Benguet province.

Under the agreement signed by Benguet Gov. Crescencio Pacalso and SNAP COO Joseph Yu, the parties decided to resolve the issue amicably and have entered into an agreement acceptable and fair to both.

“[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.

RPT is the tax on real property imposed by the local government unit (LGU).

Pacalso said the amount would be crucial in the rehabilitation efforts following the two typhoons that hit the northern part of Luzon just this month.

“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.

In the agreement, the Benguet provincial government said it “recognizes the essential and pivotal role” of SNAP Benguet in the province’s continued progress and economic development.

“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,” it said.

The dispute stemmed from an ordinance issued in 2010 which lowered the tax rate of structures from 80 percent to 40 percent.

But when the ordinance was implemented in 2014, Bokod and Itogon municipalities applied the higher tax rate of 80 percent to some SNAP properties after assessing them as machinery. SNAP filed its opposition with the provincial treasurer’s office and eventually to the local board of assessment appeals.