Creba calls for VAT exemption
By Roderick Abad – October 10, 2017
https://businessmirror.com.ph/
THE Chamber of Real Estate & Builders’ Associations Inc. (Creba) appealed to legislators to keep the value-added tax (VAT) exemption for socialized and economic housing as the Tax Reform for Acceleration and Inclusion bill is expected to be passed in the Senate soon.
Imposing VAT, according to the country’s largest real-estate developers’ organization, would raise the costs of housing units beyond the reach of millions of homeless poor.
This, in turn, will further exacerbate the ever-growing housing backlog in the country, the group said.
At least 5.7 million dwelling units were lacking as of 2016, per estimates of the Housing and Urban Development Coordinating Council.
While the bill aims to raise more money to bankroll state services and projects, Creba National President Charlie A. V. Gorayeb said that housing must be spared from any new burden to the people, for it is always a basic necessity, along with food and clothing.
“Housing must be government’s priority agenda to ensure a dignified quality of life for its citizens,” he noted.
“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.
Six years ago, the Bureau of Internal Revenue increased the threshold of VAT-exempt sales transactions of house-and-lot packages up to P3,199,200 per unit and residential lots valued at P1,919,500.
Such adjustments were based on price hikes on construction materials, including cement and steel, as well as the rise in consumer-price index, particularly for housing, from 2004 to 2010, as observed by the National Statistics Office and Bangko Sentral ng Pilipinas.
Creba National Chairman Noel Toti M. Cariño said that, under the proposed measure, the net effect of the VAT does not stop at 12 percent, since these housing categories can be availed via loans lasting as long as 30 years.
With it, he pointed out that the supposed beneficiaries stand to lose all their chances of owning a home.
Until today, housing is among the most if not the most, “heavily taxed, highly regulated” of industries, he stressed.
Creba, through its “Five-Point Agenda for Housing”, aims to address finance, land and governance issues and enable public-private partnerships to produce at least 500,000 housing units annually and help solve homelessness in the country within 20 years.
