As I See It

Consumers paying for water firms’ income taxes

/ 02:23 AM January 09, 2015

Why should consumers be made to pay the income taxes of water concessionaires Maynilad and Manila Water?

The income tax is a tax on the income of the concessionaires. That income already comes from the consumers. Why get from the consumers again to pay the tax on that income? Isn’t it enough that consumers pay very high rates for water that the concessionaires get for free (repeat, for free) and merely distribute to them? Wouldn’t it be anomalous if you are forced to pay the income tax of your neighborhood grocer?


Of course, but that is exactly what Maynilad and Manila Water are doing to their customers. They include in the consumers’ monthly bills their (the concessionaires’) income taxes. The consumers think the bill is only for the water consumed, but it is not. It includes a tax due from the concessionaires on the income they collected from their subscribers.

That’s not the only thing that the concessionaires are illegally collecting from consumers. They are also collecting payments for the Laiban Dam project. I think this project has been abandoned, but the concessionaires are collecting payments for it in the monthly water bills. The consumers pay because they have no choice. If they do not pay, their water connections would be cut off. Besides, because there are so many items included in the water bills (as in the electric bills of Meralco), the consumers do not know what they are being charged and paying for.


Consumers should be charged only when water service is being provided them, not before. But now the concessionaires are making the public pay for the investments that they should pay for the construction of the dam.

That’s not all: Consumers are also made to pay for “sewerage services” when homes do not even have any sewerage connections.

Most homes have separate, independent septic tanks.

As you can see, the water concessionaires, and perhaps also the Metropolitan Waterworks and Sewerage System, are ripping off the unsuspecting public.

And to add insult to injury, the regulatory body that regulates the concessionaires is under the MWSS. If this were a boxing match, the fight is fixed. The viewers who pay the entrance fees to the coliseum are cheated. Incidentally, MWSS officials and employees are among the highest recipients of bonuses and other benefits among government corporations.

Turning to another public service provider, if I am not mistaken, Meralco has overcharged its subscribers in the past and has been ordered by the courts to refund the overcollection to their subscribers. That was several months ago, but until now, Meralco has not even started reimbursing its customers.

The latest, unkindest cut is the doubling of fares to the three elevated train systems. The excuse of the Department of Transportation and Communications under Secretary Joseph Emilio Abaya is that the government is subsidizing more than half of the fare of each commuter from taxes paid by everyone. “Why should taxpayers in the Visayas and Mindanao pay for the transport fares of commuters in Metro Manila?” is the mantra of Secretary Abaya, and also, incidentally, of President Aquino.


It seems like a fair question, until you realize that taxpayers in Metro Manila and elsewhere also pay for the relief and aid to victims of calamities in the Visayas and Mindanao. But that is how the system of national taxation works: Everybody pays, everybody benefits. That is why we have a government—to see to it that everybody gets help and everybody shares the burden of providing that help.

The elevated trains are only in Metro Manila, it is true, but do not forget that Metro Manila is also the seat of government and the center of commerce and industry that benefit the whole country. Comparing it to an animal, it is the head. Cutting it off or injuring it would affect the rest of the body—or the rest of the country.

Densely-populated cities need fast transportation. Otherwise, its efficient functioning would be impaired, and that effect would spread to the rest of the country. That is how New York, Tokyo, London, Paris and other modern cities function efficiently.

Besides, all over the world, governments subsidize train systems, whether aboveground, on the ground, or underground and under the sea (subways). They are the cheapest mass transport systems that move the most passengers and cargo. That is how governments give back to taxpayers services in exchange for the taxes they pay.

In Europe, America, China, India, Russia and other big countries, train systems are the main means of mass transportation. The Great American West could not have been opened without the train. And in the modern world, governments are developing faster and faster trains.

It is only in the Philippines that the government has neglected its lone train system, the Philippine National Railways.

Yet, if only we have an efficient railroad, we could have avoided the Manila port congestion and the traffic jams in the metropolis and on NLEx and SLEx.

I don’t understand why the government is neglecting the PNR. We used to have an efficient one until the administration of President Diosdado Macapagal. It has deteriorated since then due to neglect.

President Aquino and whoever will succeed him should rehabilitate it.

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TAGS: consumers, Income Taxes, Joseph Emilio Abaya, Laiban Dam project, Manila port congestion, Manila Water, Maynilad, President Diosdado Macapagal
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