NGCP to Labrador: Collect from TransCo
UNPAID P211 M LOCAL TAX
THE National Grid Corporation of the Philippines (NGCP), a private firm with a 25- year concession to operate the country’s power grid, is battling in court with the municipality of Labrador over the National Transmission Corporation’s (TransCo) unpaid P222 million in local taxes.
NGCP, asserting that it is a separate and distinct entity from TransCo, says it is not liable for past local government taxes that TransCo owes to Labrador where transmission facilities are located.
NGCP won the bidding in 2007 for the privatization of the management and operation of the country’s transmission system from TransCo, a government-owned and controlled corporation.
The municipality, through the Municipal Treasurer, earlier issued a Warrant of Distraint and Garnishment to the Land Bank of the Philippines ordering the seizure and/or confiscation of NGCP’s bank deposit with Land Bank to the extent of P221,731,015.11.
NGCP maintains s that the tax liabilities should be paid by TransCo.
Ownership of all transmission assets remains with TransCo.
CA DECISION
In fighting the warrant, the NGCP filed a Motion for Partial Reconsideration last February 21 seeking the amendment of a Court of Appeals (CA) Decision on the petition filed by NGCP.
The CA decision dated January 31, 2012 did not rule with finality that NGCP should assume the local business tax liabilities of TransCo but directed that the Petition raised factual issues that need to be tried in the lower court.
Despite dismissal of the case for lack of jurisdiction, the CA declared in the last portion of its decision that based on its preliminary findings, NGCP and TransCo have no separate and distinct personalities, that Distraint is being enforced not on the property of NGCP but against the properties of TransCo in NGCP’s possession, and that the takeover by NGCP of the business of TransCo raised the presumption that NGCP assumed possession of TransCo’s assets, cash and receivables, including charges for local taxes.
NGCP, however, insists that TransCo’s tax payables due to the national government and any local government units were not transferred to it, and remains TransCo’s responsibility, despite the turnover of the business.
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