GG REPRESES
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2 yng 0-1 JUL 2013

Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
First Regular Session

arr 242
HOUSE BILLNo, _ 843

Introduced by BAYAN MUNA.
Representatives NERI JAVIER COLMENARES and CARLOS ISAGANI T. ZARATE

VALUE-ADDED TAX EXEMPT TRANSACTIONS, AMENDING FORTHE
PURPOSE SECTION 109 (1) OF THE NATIONAL INTERNAL REVENUE CODE, AS
AMENDED BY REPUBLIC ACT NO. 9337, AND FOR OTHER PURPOSES.

EXPLANATORY NOTE

‘Tis bill seeks to exempt water services from value-added tax (VAT), amending the National
Internal Revenue Code of 1997, as amended by Republic Act No, 9337,

ae ias only P7.21 per eubie meter, while Manila Water was only P4.02 per cubic meter
At present, the basic water cost for Maynilad is P47.83/cubie meter, whik the Mache
Water is P36.42/cubic meter. Meanwhile, according to the Local Water Uullines
Administration, the average basic rate of water districts is P18/cubie meter fran
P6.75/cubic meter in 1996.

{As consumers ate weighed down by the rising cost of water services, amid access to water
being an international human right, government doubly burdens the public by imposing
value-added tax on water services and other basic utilities. From the introdwstion ot the
10% VAT to its hike to 12% through the Expanded VAT (E-VAT) law, basic serncce and
utilities have been unjustly taxed, raising the cost of water services.

The exemption of water services from VAT will provide relief to the domestic economy and the
Filipino people. It is one of the most viable options for Congress to immediately act on, Small
‘venue losses may easily be offset by the increased purchasing power of households and cheaper


Production costs, as well as increased efforts in the collection of other taxes.
This measure will give economic relief to the Filipino people and allow them to invest in food,
education and health which will ensure a healthy population and labor force, as well a «

progressive nation.

Jn view of the foregoing, approval of this bill is earnestly sought.

CARLOS'ISAGANI T. ZARATE
Bayan Muna Party-list



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SIXTEENTH CONGRESS
First Regular Session

HOUSE BILLNo. _343

Introduced by BAYAN MUNA
Representatives NERI JAVIER COLMENARES and CARLOS ISAGANI T. ZARATE

Be enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

SECTION 1. Section 109 (1) of the National Intemal Revenue Code, as amended by
Republic Act No. 9337, is hereby further amended to read as follows.

SEC. 109. Exempt Transactions. - (1) Subject to the provisions of subsection O)
hereof, the following transactions shall be exempt from the value-added tax:

(A) xx

“B) xxx

Sou

«(U) xxx

“(V) SALES OF WATER UTILITIES;
“(W) SERVICES OF FRANCHISE GRANTEES OF WATER
UTILITIES;

“@X) SALE OR IMPORTATION OF MACHINERIES AND EQUIPMENT,
INCLUDING SPARE PARTS, TO BE DIRECTLY USED BY THE BUYER

OR IMPORTER HIMSELF IN THE OPERATING, MAINTAINING, IMPROVING
AND EXPANDING DISTRIBUTION OF POTABLE WATER BY WATER
UTILITIES.


SECTION 2. Repealing Clause. — All laws, presidential dectees, executive orders, presidential
Proclamations, rules and regulations or parts thereof inconsistent with this Act are hereby repealed
or modified accordingly.

SECTION 3. Separability Clause. — If any provision of this Act is subsequently declared
Ui Mtonal, the validity of the remaining provisions hereof shall remain in fall force and
effect,

SECTION 4. Effectivity Clause. - ‘This Act shall take effect immediately after its complete
Publication either in the Official Gazette or in a newspaper of general circulation in ake
Philippines.

Approved,