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SC bars Maynilad, Manila Water from charging customers income taxes
SC bars Maynilad, Manila Water from charging customers  income taxes
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SC bars Maynilad, Manila Water from charging customers income taxes
by Ellicia Del Mundo23 May 2023

The Supreme Court (SC) has issued a ruling barring water concessionaires Maynilad and Manila Water from charging customers of their corporate income taxes.

In the decision dated December 7, 2021, but was released to the media on Tuesday, Supreme Court declared that both Manila Water and Maynilad are public utilities, and thus charging their customers with corporate income taxes is prohibited.

"When, therefore, one devotes his property to a use in which the public has an interest, he, in effect grants to the public an interest in that use, must submit to the control by the public for the common good, to the extent of the interest he has thus created," SC said. citing the Kilusang Mayo Uno Labor Center v. Garcia Jr.

"Given that public utilities provide basic commodities and services indispensable to the public's interests, a public utility - unlike an ordinary private business - cannot selectively serve a clientele, but it must provide service to an indefinite public," it said.

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The SC also pointed out that the two water concessionaires do not need legislative franchise for them to be considered as public utilities.

However, the higher court noted that the income taxes "passed on to customers may longer be recovered" as the right to refund has been waived.

"Under Section 12 of Republic Act No. 6234, actions to contest the water rates may be brought only within 30 days after effectivity of such rates," it said.

The decision stemmed from the petition filed by political coalition Bayan Muna in August 2015.

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