THE Finance Department is still figuring out if it is ready to give up approximately P100 billion worth of tax incentives under the Real Estate Investment Trust program, saying it is unsure if the same amount will be recycled back to the domestic economy, Secretary Carlos Dominguez III said.
Dominguez said in a forum organized by the Manila Overseas Press Club he remained reluctant to formulate the implementing rules and regulations of Reit.
“We estimate that we will be giving up in a sense, (because we don’t have it), about P100 billion over the period. The problem is you are giving a tax incentive in the hope that the yield in tax incentives will be reinvested in the real estate business,” Dominguez said.
“But it is a hope, it is not a certainty. So at this point in time, I am not ready to say, unless I am sure, that the money is going to be recycled back, that we will give up potentially P100 billion,” Dominguez said.
He said he did not think it was fair to the Filipino public to pass a legislation or write the implementing rules and regulations for the Reit.
Earlier, Dominguez said he was amenable to any amendment to the Reit Act if there would be an assurance that money allocated for the purpose would be used for domestic activities.
The Reit Act lapsed into law in 2009 but has not really moved forward on issues like minimum public ownership and taxation.
Under the law, Reit s are required to have a public float of 40 percent in their first two years after listing with the Philippine Stock Exchange. Public ownership should rise to 67 percent by the third year after listing.
