The Senate may look into why water concessionaires Maynilad Water Services and Manila Water Co. passed the burden of their corporate taxes to consumers when it goes into session in July.
Senator Ralph Recto, former head of the National Economic and Development Authority, called the practice unethical and immoral. He said he will file a resolution asking the Senate to investigate.
“By their very essence, corporate income taxes are shouldered by the companies, which made the income and should not be passed on to their clients,” Recto, vice chair of the public services committee, said.
Government regulator Metropolitan Waterworks and Sewerage System has admitted consumers have shouldered P3.1 billion of the concessionaires’ corporate taxes since 2008. MWSS said, though, that these payments were reflected on water bills and the two corporations did not try to hide the passed-on tax payments.
Manila Water has asked the MWSS Regulatory Office to allow a P5.83/cubic-meter increase in its basic charge while Maynilad is asking to raise rates by P8.58/cu.m.
“What’s the compelling justification for approving a rate increase? If they are not practically paying income taxes and at the same time, receiving some tax perks from government, what’s the happiness in granting them a rate hike?,” Recto said.
Militant group Bagong Alyansang Makabayan, which has set protests against the water rate hikes on Friday, meanwhile said the concessionaires should forget raising rates.
“It now appears that the private concessionaires owe us lower water rates. A refund, not a rate hike, may be in order,” Bayan secretary general Renato Reyes Jr. said.
