Philippine E-Journals

The Role of Tax Exemptions in Enhancing the Efficiency of Government Financed Public Utilities: A Case Study of the National Power Corporation

Darius Felipe De Las Alas | Allan Ted Talavera | Dennis Teodoro Tenorio

Discipline: Economics, Business

 

Abstract:

The enduring effort of the government to provide the nation with electricity has given rise to several predicaments. One such tight situation concerns the financing of the National Power Corporation (NPC). The NPC's capital intensiveness calls for consistent financial support for it cannot depend on its revenues alone as this is regulated for the consumers' welfare. In this light, the NPC has been enjoying tax exemptions for the same purpose of lowering electricity rates, aside from the fact that government ownership requires the government to allocate contributions from the national budget. The dilemma hence forth lies in the recurring budget deficit that the country has been experiencing.