MANILA — President Ferdinand Marcos Jr. has ordered the reduction of real property taxes of independent power producers (IPP) who entered a build-operate-transfer (BOT) agreement with the government.

In his Executive Order No. 83, Marcos Jr. said that “all liabilities for real property taxes for CY 2024, including any special levies… on property, machinery and equipment directly used by OPPs for the production of electricity under the BOT scheme” shall be “reduced to an amount equivalent to the tax due if computed based on an assessment level of 15 percent of the fair market value” of these properties.

“All interests and/or penalties on such deficiency… are also hereby condoned, and the concerned IPPs are relieved from payement,” the order read.

The order comes after the Department of Finance (DOF) raised concerns from various local government units that IPPs in their territories “are not entitled to exemptions and privileges enjoyed by other government-owned and controlled corporation.”

The said discounted tax rate will be “applied to real property tax liabilities for succeeding years,” it said.

The DOF was also mandated to submit to the President a progress report on the implementation of the order after six months.