Wednesday , June 20, 2018

Senate OKs bill for condonation of unpaid taxes due from water districts

THE Senate passed on third and final reading Monday a bill seeking to remove the conditions of all unpaid taxes due from local water districts.

Senator Juan Edgardo Angara, chairman of Senate ways and means committee and sponsor of Senate Bill 2518, said the bill would facilitate the growth and expansion of local water districts (LWDs) by removing the conditions imposed by the Bureau of National Revenue on the condonation of unpaid taxes due from the LWDs.

Angara said LWDs were created when Presidential Decree 18 or the Provincial Water Utilities Act of 1973 was enacted into law on May 1973 to ensure that Filipinos in the countryside had access to safe and potable water.

Currently, the country has a total of 514 LWDs, which serve 19 million residents across the country.

"The unique role of water districts has long been recognized by Congress. From being classified as quasi-corporations, local water districts are now considered as government owned and controlled corporations," Angara said.

Like any other public utilities of similar nature like Metropolitan Waterworks and Sewerage System and the National Power Corporation, Angara said LWDs were exempted from paying taxes when Republic Act 10062 or an Act Granting Income Tax Exemptions to Local Water Districts was signed into law in March 2010.

Angara clarified that the law did not merely provide an income tax exemption but also for the condonation of all unpaid income taxes of water districts from August 13, 1996 up to the effectivity of the law.

The senator cited certain conditions subjected to the law: the Bureau of Internal Revenue (BIR) establishes the financial incapacity of the concerned LWDs to meet such obligations and the water district availing of such condonation shall submit to Congress a program of internal reforms.

"It is unfortunate that the noble intention of RA 10026 is being defeated by the non-issuance od the requisite revenue regulations by the BIR. Even though the law was passed on March 2010 or almost five years ago. The BIR has yet to issue the revenue regulations to implement RA 10026," the senator said.

Instead of issuing the required revenue regulations, the bureau issued a Revenue Memorandum Circular 68-2012, which outlined the procedure and the documentary requirements for the application for condonation.

Although concerned water local districts diligently complied with the memorandum, Angara said the committee found out that application for condonation of 78 LWD was not acted upon by BIR due to the absence of a revenue regulation.

Through the bill, Senate President Franklin Drilon said LWDs will be able to reach and provide service to Filipinos around the country without burdening them of "needlessly laborious bureaucratic requirements."

Senate President Pro-Tempore Ralph Recto said the proposed measure is "an excellent piece of legislation because taxes foregone will be returned to consumers by making services better, broader, and bigger."

He added that the foregone taxes, if the bill is enacted into law, will be used to finance improvements like new wells and fresh sources, new pipes and modern meters to end leaks, and even computers to plug leakages of the monetary kind.

"The main intent of the proposed measure in removing the condonation requirements is to help water districts consolidate their scarce resources and channel them into capital development, expansion of water coverage, and provision of high quality yet affordable potable water," Angara said.

"This automatic condonation will benefit not only those who are unable to pay said tax liabilities, but all local water districts since the legislative intent behind the enactment of RA 10026 will finally be given due course," he added.

SB 2518 replaced House Bill 3675 authored by Representatives Romero Federico Quimbo, Christopher Co, Emi Calizxto-Rubiano, and Rodel Batocabe, taking into consideration SB 612 authored by Recto and Cynthia Villar.

Meanwhile, the Senate also passed on third and final reading a bill seeking to declare the last full week of August as the "Armed Forces of the Filipino People Week."

Senator Antonio Trillanes IV, chairman of Senate committee on national defense and security and sponsor of House Bill 947, said the nation "shall honor, remember, and recognize the military personnel -- the men and women whi have served our nation throughout our country's history and particularly those who are on active duty in all braches of the military service, as well as our retirees, veterans and their families" during Armed Forxes Week.

HB 947 was introduced by Representatives Ashley Acedillo and Gary Alejano both of Magdalo Party-list. (Sunnex)