Wednesday, June 25, 2008 [ manilatimes.net ]
After BOI extended grant of tax perks
By Chino S. Leyco, Reporter
THE Department of Finance has cautioned the Board of Investments (BOI) against approving tax and other incentives for sham mass-housing projects.
A Finance department official said the BOI should desist from granting tax incentives to condominium projects as this result in more government revenues lost.
The Arroyo administration is hard-pressed scrounging for revenues to finance its plan to jack up spending aimed at cushioning the impact of high inflation and economic slowdown. It earlier decided to put off to 2010 a plan to balance its budget this year in light of the higher public expenditure requirements.
Trade Secretary Peter B. Favila, who also chairs the BOI, said last week the agency decided to extend the granting of tax perks to mass housing projects. The Trade secretary said the extension would encourage more real estate developers to develop new and innovative housing technologies.
The Finance department, however, wants to plug the loopholes in the government’s grant of tax incentives to mass housing projects. It wants BOI to address the gray areas and craft clear guidelines to ensure that only projects that fall under the mass-housing category receive incentives.
Mass-housing projects are those with a per-unit price of P300,000 and below.
The BOI earlier approved the incentives for projects such as the multimillion-peso low-cost mass housing venture of DMCI-Project Developers Inc. in Taguig City as well as a high-rise residential building deal in Mandaluyong City.
Eton Properties Philippines Inc. of Lucio Tan also secured tax perks for its two low-cost housing projects in Metro Manila. Eton is spending P1.09 billion for the development of One Archers Place in Taft Avenue, Manila and Eton Emerald Lofts in Ortigas Center.
Trade Undersecretary Elmer C. Hernandez, who is BOI managing head, earlier said mass housing is under review in line with the directive of the Housing and Urban Development Coordinating Council (HUDCC).
Hernandez said the BOI is predisposed to granting the same incentives under the 2008 Investment Priorities Plan only to those projects that would effectively address the housing backlog.
This move came in the wake of a surge in mass-housing projects that met the P3 million and below ceiling, but yet failed to address the housing needs of the low-income bracket.
According to the Medium Term Philippine Development Plan 2004-2010, the country’s population will need at least 3.756 million units of housing, while the government’s housing target for the period is set at 1.145 million units.
Hernandez said the country would need 2,754 projects at an average of 426 units each to construct 1.2 million low cost housing units.
Over the past two years, the BOI registered 97 mass housing projects with an equivalent capacity of 42,258 low cost housing units, representing 32 percent of the 133,183 units constructed for the period.
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