Press Release
May 28, 2008

TAX EXEMPTION FOR ELECTRIC COOPS SHOULD APPLY ONLY TO SERVICES IN MISSIONARY RURAL AREAS

Senate Minority Leader Aquilino "Nene" Q. Pimentel, Jr. (PDP-Laban) today said he favors a partial restoration of tax exemption for electric cooperatives.

Pimentel was reacting to a bill filed with the House of Representatives seeking to restore the tax exemption privilege of electric cooperatives relative to the generation and distribution of electricity to their members.

"I favor the restoration of tax exemption for electric cooperatives but only for the portion of their services to missionary areas, not for all their services."

He also said that electric cooperatives, like the major power distributors, should no longer be allowed to pass on their systems losses to their customers.

Electric cooperatives, Pimentel said, should strengthen their safeguards against loss of electricity, through technical troubles or pilferage, instead of requiring customers to absorb the costs from these systems losses.

Pimentel, principal author of the Cooperative Code of the Philippines, said that electric cooperatives are not genuine cooperatives, if strict compliance with the requirements of the Code is applied.

He underscored the need to make the electric firms servicing rural areas understand that it is incongruous for them to be called "cooperatives" when they are not. He said this flaw may be corrected as one of the amendments to the Cooperative Code to be embodied in a bill now being deliberated in the Senate.

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