If passed into law, the proposed Tax Reform for Acceleration and Inclusion (TRAIN) now under review by the Senate Committee on Ways and Means, chaired by Sen. Juan Edgardo M. Angara will remove the value-added tax (VAT) exemptions for socialized, economic and low-cost housing units costing between P450,000 and P3.2 million per unit.
In a news briefing, Rodolfo Javellana Jr. of the Union of Filipino Consumers and Commuters (UFCC) expressed fear that this “spells bad news for the 15 million overseas Filipino workers [OFWs] trying to earn a decent living away from their families and the rest of our kababayan planning to buy their own homes.”
Javellana said with the current prices for socialized, economic and low-cost housing, even workers with a take-home pay of P30,000 a month can barely afford a decently sized house and lot.
“If the Senate will agree to increase housing prices to anywhere from P50,000 to 360,000 per unit by imposing VAT, our OFWs and homeless citizens can say good-bye to their dreams of owning a piece of property for their families,” he said, underscoring that buyers will take the full brunt of the tax burden, as VAT is an after-sales tax.
Javellana said the burden will also extend beyond 12 percent, as housing loans for these amounts can only be afforded through long-term loans by the homebuyers.
The UFCC has filed an appeal to Angara to heed their call and delete the controversial TRAIN provision on housing for the sake of the homeless, which the government estimates to be at least 5.7 million families or more.
“It is sad to realize how apathetic the government is to the plight of housing over the years, and then aggravating the situation by removing the VAT exemption provided by law,” Javellana added.
“If the government can afford not to tax other sectors of society and business, then there should be more reason to spare housing, being a more basic human need.”
He said this is not to say that all provisions of the TRAIN is bad, although “our tax collectors could do a better job running after tax evaders and the government running after corrupt tax collectors first than even thinking of raising taxes.”
Housing the poor is a constitutional mandate, but the government has done little to comply with this, allocating a measly P15.36 billion for the housing sector for 2017 despite a housing crisis. It instead relies on private developers to build houses for the poor in exchange for tax benefits.