A PROPERTY group appealed to senators on Monday to keep hold of the value-added tax (VAT) exemption being given to socialized and economic housing in the wake of the expected passage of the Tax Reform for Acceleration and Inclusion bill.
In a statement, the Chamber of Real Estate and Builders’ Association Inc. (CREBA) said that if VAT-exemption is not retained, prices of residential units would go beyond reach of millions of homeless Filipinos thereby aggravating further the increasing housing backlog.
The Housing and Urban Development Coordinating Council in its latest announcement said that there are at least 5.7 million units housing backlog last year.
“While the bill intends to raise more money to fund government services and projects, housing must be spared
from any new burden as it will always remain to be—along with food and clothing—a basic human need,” CREBA national president Charlie Gorayeb said.
“Housing must be government’s priority agenda to ensure a dignified quality of life for its citizens. The P6.2 billion taxes that the Department of Finance intends to collect by taxing socialized and economic housing is too small compared to an economic slow-down that may result when Filipinos, including the 15 million who work overseas, can no longer afford to buy homes at all,” he added.
In 2011, the Bureau of Internal Revenue raised the threshold of VAT-exempt transactions for sales of house and lot packages up to P3.2 million per unit and residential lots amounting to P1.9 million.
The adjustment was based on price hikes on construction materials including cement and steel and the rise in consumer price index, particularly for housing, between 2004 up to 2010 as observed by the National Statistics Office and Bangko Sentral ng Pilipinas (Central Bank of the Philippines).
CREBA national chairman Noel Carino said that the supposed beneficiaries stand to lose chances of owning a home under the proposed measure emphasizing that the net effect of VAT does not stop at 12 percent, as purchases for these housing segments are made via loans lasting as long as 30 years.
“Even at present, housing is among, if not the most “heavily-taxed, highly-regulated of industries, a stark contrast against its globally-recognized pump-priming economic potentials,” he noted.