MWSS chief clarifies tax issue

Metropolitan Waterworks and Sewerage System (MWSS) administrator Jose Mabanta has clarified that only the real properties of the agency not actually directly and exclusively used in the supply and operation of water should be subject to real property tax.

Reacting to an item that appeared in the Nov. 1 issue of The STAR, Mabanta made the clarification based on the opinion of the Office of The Government Corporate Counsel (OGCC).

In Opinion No. 154 series of 1992 dated Aug. 10, 1992, Government Corporate Counsel Ariel Aguirre opined that though MWSS is no longer exempt from the payment of realty tax by virtue of the repealing provisions of the Local Government Code, MWSS may avail of the provisions of Section 218 of RA 7160 (Local Government Code), being a government owned and controlled corporation engaged in the supply and distribution of water, which subjects MWSS to an assessment level not to exceed ten percent.

The Aguirre opinion was reiterated by then GCC Alan Roullo Yap in November 2000 when he stated that the MWSS properties sought to be taxed by Quezon City comprising 70 percent of MWSS landholdings consist of watersheds, water basins and aqueducts of right of way, which are intended for public use or purpose and are held in trust by the MWSS on behalf of or for the benefit of the Republic of the Philippines in accordance with MWSS’ mandate to provide water to Metro Manila and its environs.

Mabanta stressed that imposing real property taxes on MWSS’ watersheds, water basins, and aqueducts of right of way would be detrimental to the public, for eventually the staggering costs of taxation would be passed on to the customers.

In 1997, the MWSS entered into a Memorandum of Agreement regarding the offsetting of water account collectibles of the Quezon City government against alleged real property tax arrears. The agreement has yet to be implemented.

Meanwhile, Mabanta bared that negotiations are ongoing with the new Quezon City Administration led by Mayor Feliciano Belmonte for a win-win solution for both parties.

Section 18 of the MWSS Charter (RA 6234) expressly provides that the MWSS shall be non-profit and shall devote all the returns from its capital investment as well as excess revenues from its operations, for expansion and improvement.