[ manilastandardtoday.com ] July 7, 2011
The Bureau of Internal Revenue is stepping up collection efforts from individual taxpayers to beef up revenues as a new law granting additional fiscal perks to property developers take effect within two weeks.
The Finance Department has approved the long-delayed and disputed taxation rules of the Real Estate Investment Trust Act, or Reit.
Finance Secretary Cesar Purisima told reporters Wednesday he approved the revenue rules prepared by the Bureau of Internal Revenue that would govern the grant of tax reliefs to real estate companies.
“I have already signed the rules, and it would be published within two days, to take effect after two weeks upon its publication,” Purisima said.
The Reit Act was passed into law in December 2009 but its implementation has been put on hold as fiscal authorities and corporate regulators failed to agree on how to divide the ownership between real estate companies and the public.
Finance earlier said Reits must float at least 51 percent of the shares to the public to avail of tax incentives and other perks. The market preferred 33 percent.
Eventually, the government and the private sector reached a compromise requiring a minimum public float of 40 percent that will increase to 67 percent within three years after listing of the Reit companies.
Reits are companies that own and operate income-generating real estate assets, which include offices, apartment buildings, hotels, warehouses, shopping centers and highways.
Property developers led by Ayala Land Inc., SM Prime Holdings Inc. and Robinsons Land Corp. have expressed interest in doing Reit offerings.
The Reit incentives are expected to reduce government’s tax take by P10 billion a year. The government is now looking at maximizing revenue collections from professionals and self-employed individuals to augment tax collections.
Purisima said in a press conference that the revenue contribution of professionals and other self-employed individuals might reach up to P140 billion a year. Elaine Ramos Alanguilan
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