CTA: CamSur province can't impose franchise tax on power coop

By Benjamin Pulta

December 20, 2023, 5:15 pm

MANILA  The Court of Tax Appeals (CTA) junked a suit filed by the Camarines Sur provincial government seeking to impose a franchise tax on an electric cooperative which already pays a franchise tax to Naga City.

In a 15-page decision dated Dec. 19, the tax court’s Special First Division denied for lack of merit a petition filed by the province to impose a franchise tax on the Camarines Sur II Electric Cooperative Inc. (Casureco Inc. II)

The tax court ruling affirmed the Sept. 17, 2021 decision of the Naga City Regional Trial Court (RTC) Branch 21 which declared Naga City as the sole local government unit entitled to Casureco II’s local franchise tax.

The province claimed it is entitled to the franchise as Casureco operates in nine other municipalities in the province –Pili, Milaor, Minabalac, Canaman, Magarao,Bombon,Calabanga, Tinambac and Siruma aside from Naga City.

In a similar case in 2012, the SC affirmed the City of Iriga’s power to assess and collect franchise tax within the entire coverage of Casureco III.

Notwithstanding the said ruling, the province still assessed Casureco II for franchise tax 2012 to 2016.

Citing the Local Government Code, the CTA in turning down the province's suit said a province may “not impose the tax on business enjoying franchise operating within the territorial jurisdiction of any city located within the province.” (PNA)