THE country’s housing backlog will worsen under the Tax Reform for Acceleration and Inclusion Act, according to an advocacy group.
Rodolfo Javellana Jr., United Filipino Consumers and Commuters president, said the tax reform bill, if passed, will remove the value-added tax exemption on the sale of low-cost, economy and socialized housing and resident lots valued at P2 million.
He said a backlog of 5.7 million units in 2016 would aggravate and could lead to more expensive housing units, since the additional tax of building houses would be passed on to the buyers by the developers.
“This would deprive and hurt the ordinary Filipino people to reach their dream of owning a decent house at an affordable cost,” he lamented.
The government can only build 200,000 new units a year against its target of 500,000 units, the group said. Without the VAT exemption, the number of low-cost, economy and socialized housing units to be built is expected to drop to 100,000 units to 150,000 units.
An additional backlog of 200,000 units to 500,000 units is expected that could redound to poverty, rampant squatting, and high incidence of criminality, it added.
The Alyansa Para sa Demokrasya represented by Fermin Idea and Damayan ng Maralitang Pilipino Api Inc. joined the UFCC in its call to reconsider the lifting of the VAT exemption for housing.
“The poor cannot benefit from the TRAIN, especially it will cause a market increase in the prices of fuel, and the basic commodities and services that the poor are availing,” Idea said.
Other sectors have expressed reservations to support the new tax reform bill, citing the poor would have to bear its brunt, such as the possible effects of high fuel rates, electricity prices, transport fares and inflation.
The version of the tax reform of Senator Juan Edgar “Sonny” Angara, committee on ways and means chairman, was anti-poor that would impact a higher burden for low-income earners in the informal sector, the groups said.