Philippines

Mini-hydroelectric Power Incentive Act (RA 7156)

Legislative

Law

Passed in 1991

RA 7156 aims to strengthen and enhance the development of the country's indigenous and self-reliant scientific and technological resources and capabilities and their adaptation to the country in order to attain energy self-sufficiency and thereby minimise dependence on outside source of energy supply. To this end, mini-hydroelectric power developers shall be granted the necessary incentives and privileges to provide an environment conducive to the development of the country's hydroelectric power resources to their full potential.

The Office of Energy Affairs is responsible for the regulation, promotion and administration of mini-hydroelectric power development and the implementation of the provisions of this Act. The mini-hydroelectric power developer must first offer to sell electric power to the National Power Corporation, franchised private electric utilities or electric co-operatives.

Mini-hydroelectric power developers shall be granted the following tax incentives or privileges: (1) special privilege tax rates to develop potential sites for hydroelectric power and to generate, transmit and sell electric power; (2) tax and duty-free importation of machinery, equipment and materials; (3) tax credit on domestic capital equipment; (4) special realty tax rates on equipment and machinery; (5) value-added tax exemption; and (6) income tax holiday.

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