Vol. XXII, No. 19 [ BusinessWorld Online ]
Thursday, August 21, 2008 | MANILA, PHILIPPINES
THE BUREAU of Internal Revenue (BIR) warned of at least a billion pesos in foregone revenues annually under a bill that seeks to exempt the Home Development Mutual Fund (HDMF), or Pag-IBIG, from paying corporate income taxes.
While BIR deputy commissioner Nelson M. Aspe did not give an estimate on foregone revenues, he recalled that HDMF paid P1.7 billion in taxes in 2006. "The position of the BIR is to oppose or object [the proposed exemption of the Fund from paying the corporate income tax]," he said.
HDMF President and Chief Executive Officer Romero Federico S. Quimbo said in a separate interview that the Fund paid P1.2 billion in income tax last year.
"We have been arguing that Pag-IBIG Fund should be tax-exempt since we are a provident fund," Mr. Quimbo said.
"As far as BIR is concerned, there will be no loss to them since we will be able to double the taxes they give up. For every peso BIR gives up for us, we re-dedicate that to housing. For every peso we get back to housing, that generates P2.36 [billion] in new taxes [from more lending]. We have the biggest multiplier effect," he said. — R. A. M. Rubio
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