FEB.

3, 2014

NR # 3366

Solon seeks one-time general amnesty or tax condonation for local water districts
The chairman of the House committee on ways and means is seeking a one-time general amnesty or condonation of unpaid taxes involving Local Water Districts to help LWDs without financial capability to pay their tax liabilities consolidate their resources in order to expand and improve water services and ensure the provision of reliable and affordable supply of water to consumers. ep. omero !"iro# $uimbo %&nd District' "arikina (ity) made the proposal through House *ill +,-. which provides that all unpaid taxes or any portion thereof due from a local water district for the period starting /ugust 0+' 011, until the effectivity of the proposed /ct shall be condoned by the government' thereby relieving all LWDs from the payment thereof. (iting statistics from the 2hilippine /ssociation of Water Districts %2/WD)' $uimbo said there are about &.0 cases involving the unpaid tax liabilities of 0,3 water districts from fiscal year 011- to &44- which should be covered by the implementation of the condonation clause of epublic /ct 044&,. !During the 5ourteenth (ongress' / 044&, was enacted with the end in view of resolving the inconsistencies in tax treatment that have probably hampered the growth and efficient provision of safe' ade6uate and potable water to more than 0. million people outside "etro "anila. Thus' / 044&, included LWDs in the list of government agencies exempt from the payment of income taxes and also allowed the condonation of their tax liabilities'# said $uimbo. However' $uimbo said the tax condonation is not automatic because / 044&, provided that unpaid taxes will only be condoned sub7ect to certain conditions namely8 0) that the *ureau of 9nternal evenue' after careful review of the financial statements of water district applying for condonation of taxes due' establishes its financial incapacity: and &) that the water district availing of such condonation shall submit to (ongress a program of internal reforms duly certified by the Local Water utilities /dministration %LW;/). !The condonation therefore' is not automatic but' rather is dependent on certain re6uirements which LWDs must comply with'# he said. "oreover' $uimbo said the *ureau of 9nternal evenue %*9 ) issued evenue "emorandum (ircular % "() ,<-&40& on =ovember .' &40&' laying down the procedures in the application and approval of the condonation of tax liabilities sub7ect to

the submission of the following re6uirements by a local water district8 Letter of application: (onditional (ertificate of (onformance: 2roof of its financial capacity: and 2roof that it has submitted to (ongress a program of internal reforms. The "( also set the deadline to apply for condonation of taxes which was on or before /pril +4' &40+. !However' two months after the deadline set in the "(' only a fraction of the 0,3 LWDs with unpaid tax liabilities had complied with the re6uirements provided under / 044&, and "( ,<-&40&. The condonation is deemed necessary for the LWDs with no financial capability to pay their tax liabilities. This would help them consolidate their resources in order to expand water services' improve water 6uality and ensure the provision of a reliable' secure and affordable supply of water to consumers'# he said. $uimbo said in order to relieve the LWDs from the additional re6uirements for the availment of the tax condonation' and allow a greater number of them to benefit from the true intent of the law' his House *ill +,-. seeks to remove the documentary re6uirements prescribed under / 044&,. !9t is believed that it was never the intent of / 044&, to make it difficult for LWDs to avail of the tax condonation. /fter all' under the same law' LWDs are now exempt from the payment of income taxes. Hence' why impose the conditions to writing off past dues when they deserved to have been exempted from the beginning. Therefore it is proposed that a one-time general amnesty or condonation of taxes involving LWDs be passed by this (ongress'# said $uimbo. The bill provides for the amendment of >ection &<1-/ of the =ational 9nternal evenue (ode of 011-' as amended' so that !/ll unpaid taxes or any portion thereof due from a local water district for the period starting /ugust 0+' 011, until the effectivity date of the proposed /ct are hereby condoned by the government' thereby relieving all local water districts from the payment thereof.# %+4) rbb