San Fernando Water Bills to Drop 12% as VAT Removed Starting March 2026
In a significant development for residents, water concessionaires in the City of San Fernando will no longer be required to pay the 12 percent Value Added Tax (VAT) on their water bills. This change is set to take effect in the March 2026 billing cycle, as announced by Mayor Vilma Caluag on February 14, 2026. The move is designed to provide much-needed financial relief to consumers, who have been grappling with rising costs in recent years.
Immediate Impact and Refund Details
The removal of VAT will result in a direct 12-percent reduction in water charges for all customers. Additionally, refunds will be issued for VAT collected beginning November 2025. While specific details on the refund process are still to be announced, officials have assured that a clear and efficient system will be put in place to ensure consumers receive their due amounts promptly. This retroactive refund underscores the city government's commitment to fairness and transparency in its financial policies.
Background on Water Utility Operations
This decision comes in the wake of significant changes in the city's water utility management. Prime Water Infrastructure Corporation, which previously operated the City of San Fernando Water District under a joint venture agreement, was suspended by the city government in November 2025. Mayor Caluag issued an executive order suspending the business permit of PrimeWater due to performance issues and numerous service complaints from residents. With the suspension of the firm's permit, operations of the water utility have now returned to the City of San Fernando Water District, allowing for greater local control and oversight.
Mayor's Statement and Future Outlook
Mayor Vilma Caluag emphasized that the VAT removal is a proactive measure to ease the financial burden on households and businesses. She stated, "This initiative is part of our ongoing efforts to support our community during challenging economic times. By eliminating this tax, we aim to make essential services more affordable and accessible for everyone." The city government plans to monitor the implementation closely and may consider further adjustments to enhance water service quality and affordability in the future.
