With the tax provision, water consumers are burdened with paying the tax obligations of Maynilad and Manila Water such as charitable contributions, expenses for basketball games, sports clinics, and other forms of donations, among others.
“With so many lawyers, you were able to include this business tax provision in the contract…You practically paid nothing. You literally passed on to consumers your capital expenditures, debts, and even corporate income tax,” Gatchalian told executives of the water concessionaires during the hearing.
“Even if you say you are not a public utility, your business is comparable to a public utility. And if you say public utility, that includes public trust,” Gatchalian said. This development came despite the decision of Manila Water and Maynilad to waive the arbitral awards granted in a ruling made by the Permanent Court of Arbitration in Singapore. In separate arbitral ruling, the government was ordered to pay P7.39 billion to Manila Water, and P3.4 billion to Maynilad. The awards were given after the government denied the two concessionaires application for water rate increase.
On rumors that the Villar family, which owns Prime Water Infrastructure Corp., might take over the water operations from Maynilad and Manila Water, Andanar said: “I don’t think so. I think the purpose here is to send the message to both Maynilad and Manila Water that the President is not accepting this kind of reasoning and this kind of onerous contract.”
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