PE2 convenes GMM: Board tackles CITIRA strategy

  • PE2 convenes GMM: Board tackles CITIRA strategy (PE2 news flash, 14 Oct 2019)
    PE2 officers (in head table) lead discussions during a PE2 general membership meeting held at the Meralco Lighthouse on 10 October 2019 (PE2 photo by Luigi Eusebio)

PASIG CITY, 10 October 2019 – The member companies of the Philippine Energy Efficiency Alliance (PE2) gathered earlier today for its semi-annual General Membership Meeting (GMM) at the Meralco Lighthouse. Sponsored by its active regular members, Meralco and MServ, the GMM was preceded by a special meeting of the PE2 Board of Trustees, which started to discuss potential impacts of ongoing legislation in support of incentive rationalization under the Government’s comprehensive tax reform program on the fiscal incentives granted under Republic Act No. 11285, otherwise known as the Energy Efficiency and Conservation (EE&C) Act.

Upon request of PE2 president Alexander Ablaza, V&A Law started to study how the EE&C Act fiscal incentives could potentially be affected by various legislative bills, especially HB 4157 or the Comprehensive Income Tax and Incentives Rationalization Act (CITIRA) bill which has been passed on third and final reading in the House and transmitted to the Senate on 16 September 2019.

In the Senate, three counterpart bills SB 535, SB 595 and SB 703 were filed, heard on First Reading and transmitted to the Senate Ways and Means Committee.

V&A Law notes that, like the Renewable Energy (RE) Act’s incentives, the CITIRA Law does not expressly repeal the Fiscal Incentives provision of the EE&C Law. However, considering that unlike the RE Act which provided for its own specific incentives, the fiscal incentives of the EE&C Law are tied to the incentives granted under E.O. No. 226, which may be repealed by CITIRA Law.

During the PE2 Board meeting, V&A Law proposed two options and a fallback plan for the PE2 Board to consider. The first option was the introduction of an additional saving clause under the proposed tax code provisions. The second option was the introduction of a separate sunset provision for the incentives available under the EE&C Law. A fallback strategy during the two-year transition period was likewise proposed by the PE2 legal team.

On behalf of the PE2 Board of Trustees, Ablaza asked the PE2 legal team to broaden the study to consider impacts of the emerging CITIRA bill on the specific income tax holiday and duty-free importation incentives granted under the EE&C Law, and on the removal of foreign ownership restrictions.

Ablaza said, “Considering the speed by which CITIRA has been legislated so far in the 18th Congress, PE2 needs to be ready with a policy strategy and position for the Senate. We need our lawmakers to understand that energy efficiency is a new economic activity that has not yet started to be catalyzed by the fiscal incentives under the EE&C Act.”

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Philippine Energy Efficiency Alliance Inc. (PE2), is a non-stock, non-profit organization of energy efficiency market stakeholders.

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