AFTER settling with the Cebu Electric Cooperative (Cebeco) a string of bills amounting to P800,000, Compostela Acting Mayor Dr. Pedro Noval will meet with a Cebeco manager to discuss real property and business taxes, which the utility firm allegedly owes the town.

It turned out Cebeco, which earlier threatened to cut off electricity at the town hall if bills remained unpaid, has yet to pay real property and business taxes, which amount to over P1 million, said Noval in a phone interview yesterday with Sun.Star Cebu.

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“We’re done complying with our obligation to Cebeco; it’s now their turn to pay us,” the Department of Interior and Local Government (DILG) 7 director said, adding he will meet with Cebeco 2 area manager Amil Niez on Monday.

Noval, who was appointed as Compostela’s acting mayor while the town’s political impasse remains unresolved, said they paid their liabilities to the power coop after receiving last week their Internal Revenue Allotment (IRA) of over P3 million.

Municipal Treasurer Lorenzo Almodiel said Cebeco will have to pay P319,327.02 worth of real property taxes, which will be shared by the province, the municipality and the barangay, and P773,378 worth of business taxes.

The business taxes, which have accumulated since 1991, do not include yet the tax penalties, which the municipality waived out of kindness, he said.

He added the municipal assessor has yet to completely assess the utility firm’s assets and properties in the town, which means the firm’s tax liabilities could be higher once the assessment is completed.

“Cebeco is liable to pay business taxes because electric cooperatives are not registered under the Cooperative Development Authority (CDA),” he said, adding that only cooperatives registered under CDA can enjoy tax exemption privileges.

Sections 193 and 234 of the Local Government Code state that electric cooperatives in the country are not exempted from paying tax, provisions which electric cooperatives in 2003 petitioned to be declared unconstitutional.

The Supreme Court, however, turned down the petition.

Almodiel said Cebeco officials, during a dialogue with town official years ago, said they would pass the tax burden to consumers through higher electricity rates.

He said he will write a demand letter to Cebeco on Monday, adding the town might be forced to auction off the firm’s real properties if it fails to pay the taxes.

Sun.Star Cebu sought Cebeco’s side on the issue but the latter’s office is apparently closed on weekends.

Meanwhile, Rep. Ramon “Red” Durano VI was quoted as saying Compostela may not receive funds from his Priority Development Assistance Funds (PDAF) since the town has no municipal council that will pass a resolution asking for financial assistance.


Noval said the congressman can channel a share of his pork barrel to the town if the latter wills so.

“If he really intends to implement projects in Compostela, he can do so even without a municipal council. If he gives funds to the town in the form of a trust fund, where projects or purposes are specified, I can readily execute these projects as the acting mayor,” he said.

Noval explained that the municipal council steps in only when the congressman extends financial assistance without a specified purpose. Such funds will go to the town’s coffers and will be appropriated by the municipal council in line with the municipal development plan.

He said DILG 7 had once received a portion of former congressman Ace Durano’s PDAF, which, the latter instructed, the department had to use to implement projects in his district.

He said the municipality had prepared a comprehensive development plan, from which Congressman Durano can choose a project to use his PDAF for.

“There is no reason I couldn’t implement a project under his PDAF. I assure him every centavo he will give the municipality will be used properly,” he added.