Mass housing projects that are worth P2 million and below located outside of Metro Manila will continue to enjoy value-added tax (VAT) exemption under the Senate version of the Tax Reform for Acceleration and Inclusion (TRAIN) bill.
The Housing and Urban Development Coordinating Council (HUDCC) estimated that from 2017 to 2022, the total housing need of the country has reached 6.58 million.
“Ayaw na po nating palalain pa itong napakalaking housing backlog ng bansa. That’s why the Senate opted to keep the VAT exemption so as not to exacerbate the housing problem of the country,” said Senator Sonny Angara, chairman of the ways and means committee.
The original proposal of the Department of Finance (DOF) sought to remove the VAT exemption of both socialized housing, which is priced at P450,000 and below, and of low-cost housing as part of its move to broaden the VAT base.
The Senate version retained the VAT exemption of all socialized housing both in and outside Metro Manila.
Senators JV Ejercito and Cynthia Villar have also pushed for the retention of such exemption.
Meanwhile, the P2-million price ceiling for mass housing projects is in line with the policy direction of the Duterte administration to disperse economic growth and opportunities to areas outside of Metro Manila.
Data from HUDCC showed that majority or 5.91 million of the total 6.58 million housing need of the country are in areas outside Metro Manila.
Furthermore, data from the Housing Industry Roadmap of the Philippines 2012-2030 shows that 60% of the housing backlog is in the economic housing segment with a price range of above P450,000 to P1.7 million.
“Pinanatili natin ang VAT exemption para hindi na magtaas ng presyo ang mga economic housing na karamihan sa mga bumibili ay low-income earners at OFWs. Dapat protektahan natin ang kapakanan nila sa halip na pahirapan pa sila,” Angara said.
The Senate version, which Angara sponsored, likewise retained the VAT exemption for senior citizens, persons with disabilities, and cooperatives, as well as of raw food and agricultural products, health and education.