Proposal seeks tax pardon for water firms

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Thursday, August 7, 2014


IF CONGRESS approves the proposal to condone unpaid income taxes of local water districts, customers of the Metropolitan Cebu Water District (MCWD) would not have to pay additional charges.

Rep. Miro Quimbo of Marikina City proposed a one-time general amnesty or condonation of taxes for local water districts that do not have financial capability to pay their tax liabilities.

Quimbo is proposing an amendment to Republic Act (RA) 10026 or the Income Tax Exemption Law of Local Water Districts. The law provides for the condonation of unpaid income taxes of water districts but subject to a review by the Bureau of Internal Revenue (BIR).

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MCWD public affairs department manager Charmaine Rodriguez-Kara said the water district can pass taxes, except withholding tax, to consumers.

Pass on

The two-percent franchise tax of MCWD has been passed on to consumers.

Kara said that if the BIR collects income tax from MCWD, its customers will have to shoulder at least P64 million a year.

The amount represents 32 percent of the annual income of MCWD, which is about P200 million.

Lawyer Myra Ravelo, MCWD assistant general manager for finance, said MCWD did not pay income tax under Presidential Decree 198.

But some sectors believe that water districts are required to pay income tax after 1996 with the passage of RA 10026.

Quimbo, in a statement distributed yesterday during the Philippine Association of Water Districts summit, said that instead of paying unpaid income taxes, water districts can use the funds to expand their services, improve water quality and ensure the provision of a reliable, secure and affordable supply of water to consumers.

Published in the Sun.Star Cebu newspaper on August 08, 2014.

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