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House panel rejects tax amnesty bill

THE HOUSE committee on ways and means has dropped Speaker Feliciano Belmonte Jr.’s proposal to amnesty tax evaders if they donate to the P84-billion housing projects of the Gawad Kalinga for squatter families, saying that would encourage tax evasion. The panel, led by Batangas Rep. Hermilando Mandanas, also rejected the controversial additional imposition of a 1-percent real property tax as government equity in the Socialized Housing Fund that would bankroll the shelter program. Instead, the panel tossed to local governments the decision on how much socialized funding tax would be imposed in their respective areas. But the panel approved a proposal that donations be fully tax deductible from the gross income of the donor during the duration of the project for eight years, which could be extended for another six years or until all the homeless families are given houses. Belmonte had earlier met with 20 other co-authors of the measure, said Cagayan de Oro Rep. Rufus Rodriguez, a co-author of the bill. Lawmakers agreed to drop the tax amnesty after civil society groups, led by Code NGO, complained that the bill would result in an added layer of bureaucracy. Code NGO executive director Donato Macasaet also said other civil society groups would not stand a chance since the bill was obviously “tailor-fit” for Gawad Kalinga as it required civil society groups to have built 1,000 homes through volunteerism to get accredited. Shortly before Congress adjourned in June, the House committee on people’s participation, led by Manila Rep. Benjamin Asilo, approved House Bill 4374 and passed it on to the Mandanas panel. Rodriguez repeated his appeal to the opponents of the GK bill, saying the GK could save the government P168 billion for building 1.2 million houses for the poor nationwide. Under the shelter-fund program, Rodriguez said, the GK would build houses with two rooms, kitchen, toilet and bath and a living room on a 30- to 40-square meter-lot for only P70,000 as against theprivate contractors’ price of P210,000 each. “Under the GK Way, the 1.2 million houses would be built for a total of P84 billion as against the P252 billion at P210,000. This could save the government some P168 billion,” Rodriguez told the Manila Standard. But Kabataan Rep. Raymond Palatino, Act Teacher Rep. Antonio Tino, and Eastern Samar Rep. Ben Evardone protested the passage of the bill that gave preference to GK over other civil society groups. They also protested the plan to tap a percentage of the value-added tax to sustain the nationwide operations of “Volunteerism in Nation Building” the Gawad Kalinga Way. They said the creation of a new agency to be led by civil society groups seemed to “supplant the primary role of the government to provide basic services to the people.” In arguing for his proposal, Belmonte said it could help build a “broad middle class” with enlightened leadership from the government and private sector. But Macasaet said the tax benefits and incentives would have a “negative fiscal impact” on the government. “The combination of these tax incentives have to be carefully studied as they may lead to significant loss of revenue for government,” Macasaet said. “The proposed bill may create easy opportunities for tax evasion.” of the tax incentives, the panel only dropped the tax amnesty that would have given “tax evaders” six months from the effectiveness of the bill within which to avail themselves of the tax amnesty.
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