A MILITANT lawmaker yesterday urged the House leadership to immediately begin committee hearings on bills seeking to remove the value-added tax (VAT) on utilities as a new round of water rate hike looms.
Rep France Castro (ACT Teachers partylist) of the Makabayan bloc said Albay Rep. Joey Salceda, who chairs the committee on ways and means, has said President Marcos Jr. himself wants the House to study the proposal to find out if the government will be able to afford the revenue loss.
She said the House has to begin discussions on the measure to ease the burden of consumers.
“We have to make sure that the removal of VAT will not lead to new taxes which seems to be the case now in Maynilad and Manila Water,” Castro said.
The anti-VAT bills filed last week by the Makabayan bloc will have to go through the committee on rules before the plenary refers the measures to the committee on ways and means.
Castro said that while Maynilad and Manila Water bills are VAT-exempt, the two concessionaires are charging exorbitant rates.
Based on the proposal of the Manila Water, the rate per cubic meter of water will increase by P8.04 per cubic meter (m3).
If approved, the water rate will increase from P26.81/m3 to P35.86/m3 starting January 2023.
For households who consume 30m3 of water a month, their water bill will increase to P866.12 from the current P679.02.
At least P190 will be added due to the proposed increase.
Manila Water also proposed to increase rate in the following years: P5/m3 in 2024; P3.25/m3 in 2025; P1.91/m3 in 2026; P1.05m/3 in 2027; and P0.97/m3 in 2028.
Based on their presentation, in the span of six years the water rate will increase from the current P26.81/m3 to P53.46/m3 in 2028.
“This is equivalent to a P26.65 increase which is almost double of the current rate,” said Castro.
Maynilad Water Services Inc. (Maynilad) is seeking an increase of P13 to P14 per cubic meter in water rates that would be rolled out in the next five years. Maynilad is proposing to increase its rate at P3.29 hike for 2023, P6.26 for 2024, P2.12 for 2025, P0.84 for 2026, and P0.80 for 2027.
Militant lawmakers last week refiled the anti-VAT bills, saying it is high time that the government “ease the burden of Filipino consumers reeling from the effects of the COVID pandemic and runaway inflation.”
House Bill No. 5994 seeks to remove VAT on systems loss in electricity; HB No. 5995 sees to remove VAT on electricity bills; HB No. 5996 seeks to do ways with VAT on toll fees; and HB No. 5997 removes VAT on water bills.
The measure was filed as the country’s inflation rate reached 7.7 percent in October from 6.9 percent in September, the highest in 14 years, also according to Philippine Statistics Authority (PSA).
By removing the 12 percent VAT on a P2,000 electric bill of a consumer, around P240 can be saved, Castro said.
Salceda earlier said it would be difficult to do away with VAT as the government needs all the revenue it can get. For one, he said, the VAT on water bills could only be removed if the franchise tax for water concessionaires is increased.
