The Dumaguete City Council has asked the Metro Dumaguete Water to defer its plan to pass on the 12 percent Value-Added Tax to consumers effective Feb. 1 this year.
The Council made the request on mass motion, and invited the MDW to the Feb. 7 Council session, after Councilor JV Imbo brought the matter to the Council’s attention in a privilege speech.
Councilor Imbo read the flyers that were distributed by MDW announcing the VAT collection, and noted that the MDW had been absorbing the VAT for the last two years, and did not pass on the tax to their water subscribers.
The MDW, in their flyers, said it could no longer continue to absorb the VAT as they had done in the last two years, citing increased costs of operations and materials.
The City of Dumaguete has also scheduled the collection of new fees on MDW’s maintenance activities, which is retroactive to 2021.
Councilor Imbo requested MDW to continue absorbing the tax, citing the hardships of ordinary Dumaguetenons.
Councilor Antonio Remollo echoed Imbo’s statement, repeating his argument that the Dumaguete City Water District had no reason to enter into a Joint Venture Agreement with a private entity as it was not mismanaged, and was in good financial condition, as they were able to give up to 18 months bonuses to their employees.
Councilor Miguel Agustin Perdices, meanwhile, questioned whether MDW enjoys the use of the DCWD water franchise.
He asked for an explanation from MDW and DCWD about their partnership to see if they are allowed to collect VAT.
Councilor Joken Arbas, for his part, said that while DCWD owns the assets, MDW is taxable, as it is a private entity.
Councilor Ma Fe. Cordova, meanwhile, said changing the law to exempt water companies from VAT will take a long time, as she joined the appeals of her colleagues for MDW not to collect VAT at this time.