Consumers to shoulder VIWAD’s P2.6-M tax payments to Capitol

Should the Virac Water District pay off the P2.6-million local franchise tax due the provincial government, it will be its 8,600 concessionaires who will eventually bear the burden through pass-on charges in their monthly water bills.
This possibility was raised after the Provincial Treasurer’s Office sent a letter last week to VIWAD General Manager Gabriel Tejerero demanding payment of P2,670,313.44, representing the delinquent franchise tax liability of the district from 2013 to 2021, within 15 days from receipt of the notice.
The demand letter was sent following the Sangguniang Panlalawigan’s denial of VIWAD’s request for a moratorium of not less than two years in the implementation of said tax.
Stressing that the LGU-run water system is a public utility engaged in water supply and distribution and thus obligated to the payment of the franchise tax to the provincial government pursuant to the provisions of the Local Government Code and Provincial Tax Ordinance, the provincial board passed Resolution No. 600-2021, sponsored by PBM Rafael Zuniega, deny the request.
It said the SP, in its quest for sustainable, robust and inclusive revenue collection, adheres to the spirit of the LGC and allied jurisprudence of the Supreme Court in the enforcement of the taxing powers of the local government.
The franchise tax is not the only imposition being levied in VIWAD, as the Virac municipal government has likewise demanded payment of the so-called “in lieu” share from the district. Mayor Sinforoso Sarmiento Jr. has reportedly held back the local treasurer’s efforts to collect the imposition.
It may be recalled that VIWAD sustained heavy losses last year after super typhoon Rolly destroyed a large part of its transmission system in Cauayan, leaving its service areas in the upper poblacion waterless for about two months.
GM Tejerero told the Tribune that its application for a rate increase, which was endorsed in a public hearing in March last year, remains pending before the Local Water Utilities Administration (LWUA).
The rate increase is supposed to generate enough revenue for VIWAD to finally grand an overdue increase in salaries and benefits to its personnel, allow the hiring of additional maintenance workers, and partially fund the system’s expansion.
Queried on the capitol’s demand for payment of the franchise tax, LWUA has reportedly advised the VIWAD management to pay what is due and recover the same from consumers through a pass-on charge.
A “one-time, big-time” charge to recover the tax payment would set back each of the 8,600 concessionaires about P310 while a 12-month recovery period would results in additional monthly charges of P25 each consumer.

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