The Supreme Court (SC) was asked on Thursday, June 1, to reconsider partially its 2021 decision as far as it barred water consumers from demanding a refund for the income tax passed on and collected from them by Maynilad Water Services, Inc. and Manila Water Company, Inc. for many years.
The ruling that bars consumers from seeking refund was contained in the SC’s decision that Maynilad Water and Manila Water are public utilities subject to the 12 percent return on investment and, thus, cannot recover from their consumers the corporate income taxes as operating expenses.
In a motion for partial reconsideration, Party-List group Bayan Muna said the SC “erred when it ruled that considering that no action to contest the water rates was brought before the National Water Resources Board (NWRB) within 30 days after the effectivity of such rates, ‘the income taxes passed on to consumers may no longer be recovered as the right to a refund had long prescribed.’”
Bayan Muna, through its counsel Maria Cristina Yambot, asked the SC to direct the Metropolitan Waterworks and Sewerage System (MWSS) to account for all corporate income taxes of Manila Water and Maynilad it allowed to be included in applicable water rates from 2002 to 2012.
It stressed that the two water utilities should be compelled to refund the “illegally” passed on corporate income taxes to their respective water consumers.
The Dec. 7, 2021 decision, written by Senior Justice Marvic M.V.F. Leonen, resolved the consolidated petitions in GR Nos. 181764, 187380, 07444, 208207, 210147, 213227, 219362, 239938) involving Manila Water Water and Maynilad Water.
In GR Nos. 181764 and 187380, the SC denied the petition for review filed by Maynilad Water which claimed that it is not a public utility whose rates may be questioned by the NWRB.
In GR Nos. 207444, 208207, 210147, 213227, and 219362, the SC affirmed the Concession Agreements entered into by MWSS with Manila Water and Maynilad, including the provision on arbitration clause.
In G.R. No. 239938, the SC granted the petition for review filed by MWSS seeking to set aside the Court of Appeals’ ruling which had affirmed and confirmed the arbitral ruling 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 Representative Carlos Isagani 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,” he said.
Bayan Muna said that since Maynilad Water and Manila Water are now considered public utilities, which are limited to 12 percent return on investment and cannot impose on their consumers their corporate income taxes, “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.”
It lamented that “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.”
It pointed out that the refund could tens of billions that could help pay months of water consumption by consumers.