October 7, 2022

In what appears to be a case of double taxation, the city council is looking into the concern raised by a taxpayer regarding her sewerage fee. 

The matter was earlier referred to the city council’s committee on laws, human rights, and justice chaired by Councilor Peter Fianza.

In his committee report, Fianza noted the owner and lessor of the RTF Building and the owner of Kurban Hotel who is a lessee in the said building had paid separate sewerage fees as seen in their tax assessments.

The collection of sewerage fees ranging between P40 and P1,500 per toilet bowl is imposed under the Environment Code for the maintenance and operation of the city’s sewerage system. 

The lessor paid for 21 toilet bowls as imposed under item B of Section 163 of the Environment Code (lodging houses, boarding houses, and dormitories) while the lessee paid for 19 toilet bowls of the same 21 toilet bowls as imposed under item E (hotels, condominiums, and hospitals).

To seek clarification on the issue, the city council invited City Treasurer Alex Cabarrubias to its session on last Sept. 5.

Cabarrubias claimed there was no double taxation in the said case. He said double taxation constitutes a single entity being taxed. In this case, there were two separate taxpayers.

However, Fianza and Councilor Betty Lourdes Tabanda disagreed, asserting that these 19 bowls were the same subject of the sewerage fees collected from the lessor and the lessee.  

“It does not seem right that they (the lessor and the lessee” are paying separate sewerage fees for the same toilet bowls” Tabanda said. 

Vice Mayor Faustino Olowan urged Cabarrubias to consider the stand of the members of the city council.

“That’s really double taxation. Taxing both the lessor and the lessee was not the intention of the framers of the Environment Code,” Olowan said. 

Cabarrubias said imposing separate sewerage fees on the lessor and the lessee is allowed under Section 164 of the Environment Code because of the presence of the conjunctions “and/or”.

Section 164 of the Code states, “The fees provided for in the  preceding section shall be levied and collected only from owners and/or administrators or concessionaires of establishments, private residences, apartments, commercial buildings, et cetera, whose domestic waste or wastewater effluents, whether raw sewage or partially treated sewage, are connected to the sewerage system of the city.”

Cabarrubias said removal of the word “and” will prevent the collection of fees from both the lessor and the lessee.

Meanwhile, he informed the city council that the Local Finance Committee is studying the proposed increase of sewerage fees which will financially sustain and support the operation and rehabilitation of the city’s sewage treatment plant (STP). 

Earlier, the city government announced that it will implement a sewerage tariff reform to be able to sustain the operation of the STP and to augment the city’s funds for the payment of the loan from the Asian Development Bank to be used for its rehabilitation and expansion. The tariff reform will bring about an increase in the sewerage fees paid by the various establishments in the city.

Tabanda requested the city treasurer to present to the city council the recommendations of the LFC. The proposal, if and when approved, will consequently lead to the revision or amendment of the provisions of the Environment Code on sewerage fees. The committee will continue to study the matter for further legislative action. – Jordan G. Habbiling