Maynilad Water Services Inc. will rebate its customers in the cities of Muntinlupa, Las Piñas, Malabon, Valenzuela, and Quezon City for its tax rates that had not been approved by the Metropolitan Waterworks and Sewerage System (MWSS).
The MWSS-Regulatory Office, in a statement, said concerned customers of Maynilad “will receive minor corrections in their water bills in the form of rebates, as a result of Maynilad’s implementation of tax rates that are not in accordance with the rates approved by the MWSS Board of Trustees.”
Last March, the MWSS-RO said that following the passage of Maynilad’s and Manila Water Co. Inc.’s congressional franchises, the water services charges of the water distribution utilities shall no longer be subject to 12 percent VAT beginning March 21, 2022.
Instead of VAT, water services of the water firms would be subject to two percent other percentage tax or national franchise tax (NFT) and the actual rate of local franchise tax (LFT) implemented by local government units.
The NFT and LFT shall be reflected as “government tax” in the customers’ water bills starting March 21.
MWSS-RO said “it has come to the attention of the MWSS-RO that Maynilad has been charging customers in the aforementioned business areas the actual LFT rates of the relevant local government units instead of the rates approved by the MWSS BOT.”
“The MWSS-RO recognizes that Maynilad implemented these rates in good faith, as the rates that it previously submitted to and approved by the MWSS BOT were outdated,” it added.
Maynilad implemented the tax rates without recommendation by the MWSS-RO and subsequent approval of the MWSS BOT, part of the procedural requirements as provided under relevant laws.
Maynilad, for its part, cited that the local franchise tax rates initially approved by the MWSS BOT were based on outdated rates.
“[H]ence, Maynilad applied the actual local franchise tax rates in computing the Government Taxes to be included in the water bills. The MWSS Board has since issued a Resolution affirming the use of actual local franchise tax rates in the computation,” it said.