Akelco owes P6.441-M franchise tax, appeals for surcharges condonation

BY BOY RYAN B. ZABAL

The Aklan Electric Cooperative (Akelco) is appealing for condonation of surcharges and penalties on franchise tax levied by the provincial government of Aklan.

Akelco is the sole power distributor in the province of Aklan, including Boracay Island and the northern towns of Antique.  

Last Monday, Akelco's legal division officer-in-charge Jose Francisco Ramos II and finance officer Mary Lobelle Resco-Refindor appeared before the Aklan Sangguniang Panlalawigan committee hearing. 

Earlier, Provincial Treasurer Suzette Pioquid sought the intervention of Aklan SP to oblige the electric cooperative to pay the franchise taxes due to the province. She even recommended a payment scheme in her letter on July 6 by offsetting the accumulated amount against the payment of monthly electric bills of the province until it will be fully settled by Akelco.

At this point, Pioquid said the Provincial Treasurers Office made on June 23 a demand letter on Akelco to pay the unpaid franchise taxes and the surcharges and interest from 2003 to 2014, which had accumulated to P6,441,949.73. 

Akelco started remitting its franchise tax payments in 2010 which covered the franchise taxes for the year 2003 to 2007. It paid a total of P6,000,540.80 from the period 2013-2014, but failed to pay the interest due of P3,331,247.76 and the surcharges of P1,822,248.55 as of  June 2015. 

On February 26, 2010, Akelco paid P1.202-million and P1.220-million on December 26, 2011. On December 28, 2012, it paid P1.734-million.

On September 3, 2013, Akelco also paid P788,213. The last payment of Akelco was made on May 26, 2014 for P1.055-million. 

With this staggering amount,  Akelco representatives assured the Aklan SP members and Vice Governor Gabrielle Calizo-Quimpo that the power distributor will pay the current franchise taxes as long as the surcharges and interest due are condoned by the provincial government.

Pass-through cost

Ramos said the franchise taxes levied by the provincial government are pass-through cost which they could recover from customers. 

If approved by the Energy Regulatory Commission (ERC), the charges will be reflected in the monthly power bill of Akelco member-consumers.

"When we started the payment of franchise taxes in 2010, Akelco already submitted a plea to Aklan SP to spare us from paying the surcharges and interest due," Ramos said during the committee hearing. 

Electric cooperatives are not exempted from paying the local franchise tax imposed by the local governments. 

Under Republic Act No. 7160, otherwise known as the Local Government Code of 1991, franchise tax is imposed a tax on businesses at a rate of fifty percent (50%) of one percent (1%) of the gross annual receipts, which shall include both cash sales and sales on account realized during the preceding calendar year within this province.