Tax exemption for water districts pushed

MANILA, Philippines - Amidst the country’s suffering from drought due to El Niño, various sectors are urging President Arroyo to immediately sign the enrolled bill (S. No. 3392/H. N. 5210) exempting local water districts from income tax.

In a speech before the 31st Annual Convention of the Philippine Association of Water Districts (PAWD), attended by more than 1,000 general managers and board of directors of water districts nationwide, Sen. Miguel Zubiri said that under the enrolled bill, the amount that would have been paid as income tax and saved by local water districts shall be used for capital development expenditure in order to expand water services coverage and provide safe and clean water in the provinces, cities and municipalities.

In the same convention, LWUA chairman Prospero A. Pichay said LWUA —the national agency mandated by laws to regulate the local water districts — has endorsed the signing into law of the enrolled bill for the benefit of Filipinos getting water through water districts.

In his letter of appeal to the President, on behalf of 478 operational water districts, serving 15 million Filipino, PAWD president Delfin C. Hilario said the bill’s enactment into law would enable water districts to bring service to more waterless communities that are not yet reached by piped water, improve water quality, thus reducing water-born diseases and would help water districts sufficiently meet the effect of El Niño.

On the other hand, lawyer Rodelio T. Dascil, director general of Senate Tax Study and Research Office (STSRO), said Congress studied the bill carefully and adopted the strategy of exempting local water districts from income tax as a response to the reality that water scarcity and misuse pose threats to sustainable development and environment. He stressed that the bill’s passage would benefit millions of people through better access to potable water.

During a public hearing on the bill, the Department of Justice (DOJ) said that if Napocor and MWSS are exempt from taxable income, it does not see any point in not exempting the local water districts.  As opined by DOJ, in Camarines Norte Water vs. BIR, there is no distinction whatsoever between the said public utilities. Thus if and when the local water districts will not be exempt and other similarly situated are exempted, that will be discriminatory.