PARTYLIST group Bayan Muna yesterday asked the Supreme Court (SC) to partially reconsider its decision that barred water consumers from demanding a refund for the income tax collected from them despite its ruling that private concessionaires are public utilities and, thus, cannot recover their corporate income taxes as operating expenses from consumers.
In its partial motion for reconsideration, Bayan Muna, through its counsel Maria Cristina P. Yambot, also asked the Court to direct the Metropolitan Waterworks and Sewerage System (MWSS) to account all corporate income taxes of Maynilad Water Services Inc. and Manila Water Company Inc. it allowed to be included in applicable water rates from 2022 to 2012.
The petitioner insisted that the water utilities should be compelled to refund the “illegally” passed on corporate income taxes to their respective water consumers.
Bayan Muna’s partial MR stemmed from the ruling issued by the Court en banc dated December 7, 2021, but was made public only last May 5, 2023.
In the said decision, the High Tribunal declared that water concessionaires Manila Water and Maynilad as public utilities, thus, cannot recover their corporate income taxes as operating expenses from consumers.
However, the SC denied the plea of Bayan Muna for refund, noting that the right to refund had already long prescribed due to the failure of any party to contest the water rates before the National Water Resources Board (NWRB) within the prescribed period of 30 days after the effectivity of such rates.
The 102-page decision was penned by Senior Associate Justice Marvic M.V.F. Leonen, which resolved consolidated petitions (GR 181764, 187380, 07444, 208207, 210147, 213227, 219362, 239938) involving Manila Water and Maynilad.
In GR 181764 and 187380, the SC denied the petition for review filed by Maynilad claiming it is not a public utility whose rates may be questioned by the NWRB.
In GR 207444, 208207, 210147, 213227 and 219362, the SC upheld the respective Concession Agreements entered into by MWSS with Manila Water and Maynilad, including the Agreements’ arbitration clause.
In GR 239938, the Court granted the petition for review filed by MWSS seeking to set aside the Court of Appeals’ ruling which had affirmed and confirmed the arbitral in favor of Maynilad.
“We are glad that the Supreme Court has now finally resolved the debate that has been going on for decades whether Maynilad and Manila Water are public utilities” former Bayan Muna Rep. Carlos Isagani T. Zarate said.
“We are merely moving for partial reconsideration of the Court’s decision prohibiting the consumers from demanding a refund for our payment of their income tax for many years,” Zarate added.
The petitioner said since Maynila and Manila Water are now considered public utilities, they are limited to a 12-percent limit on its returns of investment and prohibited from imposing on the public their corporate income tax.
“We hope that the Supreme Court will complete the momentous landmark decision by giving relief to millions of consumers who are suffering from extreme hardships due to inflation, low wages and unemployment. We were previously forced to pay these corporate income taxes despite our continuing protest and it is but right that we will be granted a refund because of the people’s victory in the Supreme Court.
The refund could amount to tens of billions that could help pay months of water consumption by consumers,” the petitioner added.
Bayan Muna argued that the 30-day period for the filing of protest before the NWRB has yet to prescribe considering that the SC’s ruling came out only this month.
“We argue that it is only now that both concessionaires are declared public utilities granting us the clear right to file a protest with the NWRB. Therefore, it is only now that the 30-day rule should be required,” he said.
“We are thankful of the Supreme Court for siding with the consumers in the landmark decision. We just hope that it completes the relief asked by consumers and grants us the right to demand a refund and take back the billions we paid for the corporate income tax of the Maynilad and Manila Water arbitrarily imposed on us despite our opposition,” Bayan Muna’s statement read.
