The removal of the value-added tax in water bills is a result of the water concessionaires’ acquisition of their franchises, according to the Regulatory Office of the Metropolitan Waterworks and Sewerage System.
Catherine Talavera | March 4, 2022
Customers of Maynilad Water Services Inc. and Manila Water Company Inc. will see lower monthly bills starting March 21 due to the removal of the 12 percent value-added tax (VAT).
The removal of the VAT in water bills is a result of the water concessionaires’ acquisition of their franchises, according to the Regulatory Office of the Metropolitan Waterworks and Sewerage System (MWSS-RO).
In a virtual press briefing on Thursday, March 3, MWSS-RO chief regulator Patrick Lester Ty said the total current charges for water and wastewater services in the customers’ statement of account (SOA) will no longer bear the 12 percent VAT.
A lower “other percentage tax” or OPT will be added to the amount.
Ty said the OPT would be reflected as “government tax” in the customers’ monthly SOA starting March 21.
The OPT is composed of a two percent national franchise tax (NFT) as well as the actual rate of local franchise tax (LFT) implemented by the local government unit, which may differ per local government unit or LGU.
Ty said the government tax for Maynilad customers could range from two percent to 2.825 percent.
Manila Water customers may see government taxes from 2.5 percent to 2.825 percent.
As an example, Ty said that with the 12 percent VAT, the average monthly bills of Maynilad customers consuming 10 cubic meters (cu.m) was P130.42.
With the lower OPT, the average monthly bill will be reduced from P130.42 to P118.78 or P119.74 per month.
This means customers will see a reduction of P10.68 to P11.64 in their monthly bills.
Average monthly bills of Maynilad customers consuming 20 cu.m per month will be lower by P40.04 to P43.64 from the current monthly bill of P488.82.
Those consuming 30 cu.m per month will see a reduction of P81.75 to P89.10 from the current average monthly bill of P997.93.
Ty said the water bill of Manila Water customers consuming 10 cu.m per month would be lower by P12.39 or P12.82 from the current average monthly bill of P151.22.
Average monthly bills of Manila Water customers consuming 20 cu.m per month will be lower by P12.39 to P12.82 from the current monthly bill of P333.47.
Those consuming 30 cu.m per month will see a reduction of P55.62 to P57.59 from the current average monthly bill of P679.01.
The removal of the 12 percent VAT is due to the passage of Republic Act Nos. 11600 and 11601 granting Maynilad and Manila Water, respectively, franchises to establish, operate and maintain waterworks system and sewerage, and sanitation services in the concession areas.
Under the franchises, which were signed by President Duterte on Dec. 10, 2021, the water companies will have a term of 25 years or until 2046.
Maynilad is the largest private water concessionaire in the Philippines serving over 1.4 million customers. It maintains and operates some 6,831 kilometers of primary, secondary and tertiary pipelines.
It serves the west zone areas of Caloocan, Las Piñas, Malabon, Muntinlupa, Navotas, Parañaque, Pasay and Valenzuela as well as parts of Cavite, Makati, Manila and Quezon City.
Meanwhile, Manila Water serves the east zone, which encompasses parts of Makati, Mandaluyong, Marikina, Pasig, Pateros, San Juan, Taguig, most parts of Quezon City, portions of Manila as well as several towns in Rizal.
Source: https://www.onenews.ph/articles/maynilad-manila-water-bills-lower-without-12-vat