Wednesday, 13 October 2010 00:00 [ manilatimes.net ]
By Likha Cuevas-Miel, Assistant Business Editor
THE loose definition of ‘mass housing’ has been a source of government revenue hemorrhage, according to a Department of Finance (DOF) official.
The source said the DOF and the Department of Trade and Industry (DTI) had an agreement during the previous administration that provided for a review of projects seeking tax incentives before granting them the perks.
“We have recommended that some of these should not be granted [the perks] but they [DTI] still allowed these projects,” the source said.
“What is worrisome is that not all of these are housing for the low-income families. There are BOI-approved condominium projects that sell units from P1.5 to P3 million each,” the source said.
“We didn’t endorse those projects. [Only] socialized housing [should be given] incentives. The problem is that ‘mass housing’ is loosely defined. A 300-unit condo project that targets the middle income market is still categorized under mass housing but you can hardly call that socialized housing,” the source said.
According to Board of Investments data, only less than a fifth of all mass housing projects given tax and other incentives since 2003 have been completed and sold as of March this year.
Finance Undersecretary Gil Beltran however said these mass housing projects only get perks corresponding to the percentage of units completed. The low number of completed homes, therefore, is revenue-neutral since, “they would not get perks if they do not build,” he said.
The BOI data is also “not surprising,” he said, since housing projects only start commercial operations after two years from approval.
Data from the DOF shows that about 50 percent to 60 percent of all projects approved by the BOI are mass housing. In 2009, 77 housing projects or 55 percent of those that applied for BOI registration would be receiving P6 million in incentives each a year for four years.
This means that the government would be losing P1.85 billion in revenues from housing projects that applied for perks in 2009 alone.
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