MWSS: VAT to be scrapped in Maynilad, Manila Water bills starting Mar. 21

(FILE) A barangay public safety officer checks leaks on pipes and water meters in Philcoa, Quezon City on Wednesday, December 11, 2019.  INQUIRER PHOTO / GRIG C. MONTEGRANDE

MANILA, Philippines — Manila Water and Maynilad customers will be paying less with the removal of the 12-percent value added tax (VAT) in their water bills starting March 21, the Metropolitan Waterworks and Sewerage System (MWSS) Regulatory Office said Thursday.

“With the passage of Republic Acts No. 1600 and 11601 granting Maynilad Water Services Inc. and Manila Water Company Inc., respectively, franchises to establish, operate, and maintain waterworks system and sewerage and sanitation services in the concession areas, the MWSS Regulatory Office announces that the total charges for water and waste water services in the customers’ statement of account shall no longer be subject to the 12-percent value added tax or VAT, but now shall be subject to the other percentage tax which is equivalent to 2 percent national franchise tax and actual rate pf the local franchise tax implemented by the local government unit,” MWSS Chief Regulator Patrick Lester Ty said in an online press briefing.

“These changes will result in a reduction in Maynilad and Manila Water customers’ monthly water bills. The other percentage tax and the local franchise tax shall be reflected as government tax in the customer’s statement of account beginning March 21, 2022,” he added.

According to Ty, the national franchise tax is 2 percent while the local franchise tax ranges from 0.0 to 0.825 percent depending on the local government unit.

He explained these will effectively replace the VAT in the water bills.

“So the public can expect a 9.125 to 10% reduction in their monthly water bills starting Mar 21,2022,” he said in a text message.

Ty added that VAT will be removed in the water bills starting March 21 as it is the effective date of the legislative franchises of Manila Water and Maynilad.

“Starting March 21, there will be no longer any VAT in your water bill because that’s the effective date of the legislative [franchises]. March 21 is the effective date of the legislative franchises of Manila Water and Maynilad, so effective that date, they are no longer subject to VAT and they are now subject to franchise taxes,” he explained.

The laws granting 25-year franchises to Maynilad and Manila were signed by President Rodrigo Duterte in December last year.

Maynilad is currently servicing the west zone of Metro Manila and Cavite while Manila Water is servicing the east zone of Metro Manila and Rizal.  With reports from Jericho Zafra, Inquirer trainee

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