‘Water companies can’t charge income tax to consumers’

MANILA, Philippines — Maynilad and Manila Water have been barred by the Supreme Court (SC) from charging their income taxes to consumers on their water utility bills after the two concessionaires were declared public utilities.

In a 102-page decision made public yesterday, the SC said it would be unjust to allow the two companies to charge their customers in order to pay their income taxes.

“A large segment of the water-consuming public will be made to pay for something that has no direct benefit to them, while some will enjoy water services without shouldering the same burden. This cannot be allowed,” the SC wrote, stressing that allowing the companies to include its corporate income taxes in the chargeable rates to consumers would “result not only in unjust but also inequitable rates.”

The SC decision now means that consumers receiving water supply from the two companies would receive significantly lower monthly water bills.

However, the high court did not rule on whether the companies could refund the customers they billed in previous years with rates including their income tax charges.

The petitioners, led by Bayan Muna chairman Neri Colmenares and executive vice president Carlos Zarate, vowed to press for a refund.

“While we are glad that the Supreme Court declared Maynilad and Manila Water as public utilities and therefore regulated as such, we are dismayed that the decision did not allow us to demand a refund of all the corporate income tax and other overcharges imposed on us through the years,” Zarate said in a statement, adding the petitioners are studying whether they would file a motion for reconsideration on the refund aspect.

“The billions of pesos in refunds would help the people a lot, especially in the midst of rising prices and low wages,” Zarate added. – Bella Cariaso