REVENUE MEMORANDUM CIRCULAR NO. 68-2012 issued on November 5, 2012 prescribes the guidelines in the processing of requests for condonation of tax liabilities of local water districts.
                                                                                                                                                                          Local water districts that intend to avail of condonation of tax liabilities must file with the Technical Working Committee on Abatement, through the Assistant Commissioner – Collection Service as Chairman, a letter application stating:
                                                                                                                                                                             i.   That it is a duly organized local water district;
           ii.   That it intends to apply for condonation of unpaid tax liabilities;
           iii.  A detailed statement of the unpaid tax liabilities which it seeks to be condoned,                               including the amount/s of basic taxes, penalties and surcharges, taxable year/s involved,                and other relevant data. 

          The following documents must be submitted together with the application:
                                                                                                                                                                            i.   Conditional Certificate of Conformance issued by the Local Water Utilities Administration;
          ii.  Proof of its financial incapacity; and
          iii. Proof that it has submitted to Congress of the Philippines a program of internal reforms,                  duly certified by the local water utilities administration, that would bring about its                            economic and financial viability.

         The BIR shall not be precluded from requiring additional documents to prove entitlement of a local water district to tax exemption under the prevailing circumstances.

          All applications for condonation must be filed on or before April 30, 2013. No application for condonation may be processed after the said date.