THIS week, several non-government organizations and OFW groups intend to submit to the Senate and the Department of Finance a position paper against the imposition of 12 percent value added tax on low-cost housing. This proposed additional VAT is part of the TRAIN package that has already passed the House of Representatives and is now being debated at the Senate.
According to tax experts, once the law is passed, socialized housing with a price ceiling of P450,000 will cost P504,000; economic housing with a price ceiling of P1.7 million will increase to P1.9 million; and a low-cost housing unit with a price ceiling of P3 million will now have a price tag of P3.4 million. With these cost estimates, overseas Filipino workers would have to work harder and longer to be able to pay for their dream house.
The enactment of the TRAIN (Tax Reform for Acceleration and Inclusion) bill will lead to pass-on VAT charges on house and lot packages of P3.1 million and below. These are not exorbitant homes in prestigious locations but start-up homes purchased by minimum wage earners, contractual employees and overseas workers through their SSS or PagIBIG Fund memberships, to be amortized over a period of two or more decades. Why burden these aspiring homeowners with additional taxes?
Additional taxes on socialized, low-cost and economic housing will also raise amortization rates, thus adding to the burden of new homeowners. In exchange for such burdens, the State would earn P6 billion in revenues. Given the long history of tax collection inefficiencies and even under-spending by various national agencies, it is difficult to understand why the government insists on penalizing those at the threshold of middle-class life, when it cannot even police its own ranks.
Sen. Cynthia Villar, in a public hearing on the TRAIN bill, posed this question to the Department of Finance representative: “Is it worth it na hindi mo pabilihin ng bahay ang mga OFWs para mabigay mo sa gobyerno tapos hindi naman gagastusin ng maayos ng gobyerno?” (Is it worth it for OFWs not to be allowed to purchase housing just so you can give government some revenues which the government does not spend wisely anyway?)
ACTS OFW party-list Rep. Aniceto “John” Bertiz III said that the imposition of the 12 percent VAT on low-cost and socialized housing is anti-OFW because it affects the kind of properties that ordinary workers and OFWs aspire for. “These are the houses that our OFWs can afford not immediately, but through years of hard work and sacrifices. Removing the VAT exemptions on low-cost, socialized and economic housing penalizes the poor, while the extremely rich are able to avail of tax loopholes with the help of their connections and legal experts.”
Luther Calderon, an OFW advocate and founder of KAMPI (Kabalikat ng Migranteng Pilipino), is one of those vigorously opposing the imposition of the 12 percent VAT on house and lots costing P3 million or less.
“Around 60 percent of those who avail of low-cost housing loans for property less than P3 million are OFWs. They were never consulted about the intent of the TRAIN bill, and many of them are unaware of the DoF’s plan to remove the VAT exemption on affordable houses,” Calderon said.
We hope that the Department of Finance and the Senate committee on ways and means will give weight to the position taken by various OFW groups. Wouldn’t the revenues from sweetened beverages and assorted products and services be enough to sustain government’s public spending? Do we really have to stand in the way of an ordinary worker’s dream of owning a home no matter how little the square footage, as long as it has a title to prove possession, as a matter of pride and accomplishment? Isn’t that what we, as a society, want?
You cannot talk about compassionate government spending and then try to earn from the shallow pockets of those who have the least but are fighting so hard to have more.
You cannot say that we need P6 billion in revenues and so we will impose taxes on potential buyers of P500,000 homes. Who would buy that kind of home? A laborer would. How can you even think of taking money from someone who is already on survival mode? If you can’t help them by giving them better jobs, then at least don’t block their dream to buy the most affordable house in the market.
I say no to the VAT on low-cost housing. That tiny house is an ordinary OFW’s biggest dream. Our government should find ways to make that dream happen, instead of making it even more elusive for the have-very-little to gain a little more in life.