‘Consumer groups can sue water firms’

MANILA, Philippines - Consumer groups can file a class suit against Manila Water Co. and Maynilad Water Systems Inc. before the Supreme Court (SC) for collecting excessive payment and passing on their corporate taxes to consumers, former senator Edgardo Angara said yesterday.

Angara said the Metropolitan Waterworks and Sewerage System (MWSS), which has regulatory powers over the two concessionaires, can exercise its authority and direct them to stop passing on their income taxes to consumers.

“Of course they can do that. They can decide preliminarily, yes, I think we made a mistake. They are giving the concessionaires the right or the privilege to pass on their income taxes to consumers and it is a legal mistake,” he added.

Angara said consumers “who feel aggrieved can appeal to the SC because the high court will be the final arbiter.”

“Just like in the case of Meralco, it’s a consumer lawsuit,” he added.

Angara cited as legal precedence the case of Meralco (Manila Electric Company), which was ordered in recent years to refund overpayments to consumers.

“This is not new because Meralco used to pass on their income tax to consumers, and they lost the case in the SC. The high tribunal will not side with them,” he said.

“The SC had previously ruled that they should not pass income taxes to consumers. The same principle should apply for water, because water is a public utility,” he added.

Angara said it would be best for the Senate tax study group to look into the issue concerning the water concessionaires.

“It is such an important issue, and it has financial implications to both consumer and provider,” he said.