askST: Who will be affected by the new water taxes come 2025?

SINGAPORE - Fewer than 30 private water suppliers – including large rainwater harvesters and private desalination plants –

will have to pay taxes to national water agency PUB from early 2025.

PUB said on Aug 3 that the new taxes – the waterborne tax and the water conservation tax – will largely affect country clubs, golf courses and certain industrial premises.

These private water suppliers collectively account for about 1 per cent of total water demand in Singapore.

The Straits Times answers some questions on this topic.

Q: What are these private water suppliers, and what is a large rainwater harvester?

A: Private water suppliers are entities that do not belong to PUB; they can be other public agencies or private companies.

Large rainwater harvesters have rainwater harvesting tanks bigger than 350 cubic m.

Rainwater is collected in a large tank and subsequently treated to be used as non-potable water, such as for watering plants.

Laguna National Golf and Country Club executive director Kevin Kwee said that it collects rainwater in two large lakes on its golf courses and uses it for irrigation purposes.

The club uses technology to ensure more efficient water use, which can help it get past periods of drought.

Further assessments would have to be made to determine how the tax would affect the club, said Mr Kwee.

Singapore Island Country Club declined to respond to queries from ST, while Orchid Country Club said it is still assessing the impact from the tax.

According to Mandai Wildlife Reserve’s website, rainwater harvesting features are implemented – when feasible – in developing parks.

They are projected to meet 5 per cent of the Mandai precinct’s water needs.

A spokesman for the organisation said it is reviewing the implications of the waterborne tax on Mandai Wildlife Group. 

The Penguin Cove in Bird Paradise is specially designed to collect rainwater, which is stored in an underground tank and used for watering plants and washing floors.

The park said on its website that it is exploring the feasibility of capturing rainwater on-site in existing parks to decrease potable water usage.

Q: How much are the taxes, and why are rainwater harvesters being taxed if they are helping to conserve water?

A: Aside from water tariffs, PUB’s customers are also subject to two types of tax – the waterborne tax (WBT) and the water conservation tax (WCT).

The WBT is currently paid by all water users, regardless of whether their premises are connected to PUB’s used water network. The current WBT for non-domestic premises is $0.92 per cubic m of water.

Both large rainwater harvesters and private desalination plants will therefore be required to pay the WBT from early 2025.

PUB said that it had seen an increase in the number and scale of these private suppliers, and would need to maintain sufficient reserve capacity to ramp up water production at short notice in case they face disruptions or stop supplying their customers.

The WCT is a tax to encourage water conservation and reflect the scarcity value of water.

Rainwater harvesters will not have to pay the WCT since they are already helping to conserve treated water by using rainwater.

It is imposed only on private desalination plants when they sell water to another party.

However, the rate of the WCT will differ depending on the type of water supplied – whether potable or non-potable – and who it is sold to.

For example, the WCT imposed on potable water sold to shipping customers is currently $0.96 per cubic m of water.

It will not apply to private desalination plants supplying water for their own use, as PUB recognises that there is already a strong business case for them to conserve water due to the high cost of desalination.

The charges will be introduced from early 2025 in two phases – starting with 50 per cent of the prevailing WBT and WCT rates in 2025. It has not been stated how much these taxes will be.

The full prevailing rates will apply from 2026, to provide time for private water suppliers to adjust to the changes.