Wednesday, June 26, 2013

Labor group demands refund of water utilities’ income tax charged to consumers

26 June 2013

The labor group Partido ng Manggagawa (PM) is demanding immediate refund of some P15-B of corporate income tax passed on to consumers by two private water concessionaires Maynilad and Manila Water. 

The group also joined other groups in expressing opposition to the pending rates hike being applied for by the two private water concessionaires.

PM spokesperson Wilson Fortaleza said hiding corporate income tax under a different name on public utilities’ operating expenses (opex) has already been declared illegal and fraudulent by the Supreme Court in 2002, in the case of Meralco vs Lawyers Against Monopoly and Poverty (LAMP). 

“We logically assume that after the Supreme Court decided on this matter, all regulatory bodies such as the Energy Regulatory Commission (ERC), the National Water Resources Board (NWRB) and the Regulatory Office (RO) of the Manila Water and Sewerage System (MWSS) were properly informed and therefore presumed to be more proactive in preventing such violations in the future,” stated Fortaleza.

“Lumalabas natulog sa pansitan ang ating water regulators, notwithstanding the fact that they belong to corporate fat cats who were receiving large bonuses from taxpayers’ money,” added Fortaleza.

The group likewise lambasted the government for allowing these things to persist despite knowing its obligations to ensure access to water to every citizen.  “As a universal human right, water must be highly regulated if not provided free to every citizen,” insisted Fortaleza.

The labor group stressed that the original sin was in the privatization program of the government.  Unless reversed, consumers will eternally perish from private rent-seekers who find the government very tolerant and charitable on their plundering activities.

Water rates increased by epic proportions since MWSS was privatized and divided into two concession areas in 1997.  Maynilad won the bid for the west zone for Php 2.61 per cubic meter while Manila Water got the east zone for Php 4.96 per cubic meter. Today, Maynilad charges at least Php 30 per cubic meter for those who are consuming not lower than 20 cu.m. per month. “That's a revolting 1,000% increase!,” Fortaleza exclaimed.

He pointed out that owners of Maynilad and Manila Water belong to 40 richest families, who according to studies, control over 75% of the country’s gross domestic product or GDP.  

“This explains why despite positive GDP growth during the last ten years, the highest was 7.8% in the first quarter of 2013, millions of Filipinos remain poor,” concluded Fortaleza.

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