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This page features the full text of
Republic Act No. 7109
AN
ACT GRANTING TAX EXEMPTION PRIVILEGES TO LOCAL WATER DISTRICTS
REPUBLIC
ACT NO. 7109AN
ACT GRANTING TAX EXEMPTION PRIVILEGES TO LOCAL WATER DISTRICTS
Section
1. Exemption from taxes. — A
water district created pursuant to Presidential Decree No. 198, as
amended,
shall be exempted from the payment of (1) income taxes, except taxes on
interest income from deposits and on investments that have no direct
relation
with water service operations; (2) franchise taxes; and (3) duties and
taxes on imported machinery, equipment and materials required for its
operations:
Provided, That such machinery, equipment and materials are not
domestically
manufactured at comparable and competitive prices and quality.
chanrobles virtuallaw libraryred
Sec.
2. Additional Exemption Under
the Real Property Tax Code. — All lands, buildings, and other real
property,
including equipment attached thereto, that are used for water supply
generation
and distribution shall be exempted from real property taxes: Provided,
That the land or building is not used for office or any other
commercial
purposes. chanrobles virtuallaw libraryred
Sec.
3. Period and Conditions of Exemptions.
— The tax exemption privileges provided for in Sections 1 and 2 to all
water districts shall be enjoyed only for a period of five (5) years
from
the effectivity of this Act: Provided, That the water districts shall
adopt
internal control reforms that would bring about their economic and
financial
viability: Provided, further, That, for a water district to be entitled
to the tax exemption, its appropriation for personal services, as well
as for travel, transportation or representation expenses and purchase
of
motor vehicles, shall not be increased by more than twenty-five percent
(25%) a year during the period of exemption.cralaw:red
Sec.
4. Statistical and Financial
Statements. — All water districts, through the Local Water Utilities
Administration,
shall furnish the Bureau of Local Government Finance of the Department
of Finance, hereinafter referred to as the Bureau, on an annual basis,
with statistical data and financial statements regarding their
operations
and other information as may be required, for purposes of monitoring
compliance
with the provisions of this Act and reviewing the rationalization for
tax
and duty exemption privileges. chanrobles virtuallaw libraryred
Sec.
5. Condonation of Taxes and Duties
Due. — All unpaid taxes and duties or any portion thereof due from a
local
water district for the period starting October 15, 1984 until the
effectivity
date of this Act are hereby condoned by the Government subject to the
following
conditions: chanrobles virtuallaw libraryred
(a) That
the Bureau, after careful review of the statistical data and financial
statements of a water district applying for condonation of taxes due,
establishes
its financial incapability, after providing for its maintenance and
operating
expenses, debt servicing and reserve fund, to meet such obligations for
the period stated herein; and
chan
robles
virtual law library(b) That
the water district availing of such condonation submit to the Bureau a
program of internal reforms, duly certified by the Local Water
Utilities
Administration, that would bring about its economic and financial
viability.chanrobles virtual law library
Sec.
6. Rules and Regulations. — The
Secretary of Finance shall promulgate the rules and regulations
necessary
for the effective implementation of this Act.
chanrobles virtuallaw libraryred
Sec.
7. Repealing Clause. — All other
laws, decrees and orders or rules and regulations, or parts thereof,
which
are inconsistent with this Act are hereby repealed or modified
accordingly.
Sec.
8. Effectivity. — This Act shall
take effect upon its approval. chanrobles virtuallaw libraryred
Approved:
August 14, 1991
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