Owning a house gives a sense of pride and accomplishment for Filipinos who have worked tirelessly overseas.
However, OFWs may have to work harder to purchase their dream homes as the Tax Reform for Acceleration and Inclusion (TRAIN) bill that proposes the addition of Value Added Tax (VAT) on low-cost housing has been passed by the House of Representatives and is now under the Senate deliberation.
Once the law is passed, the sale of low-cost housing valued at P1.7 million will increase to P1.9 million, while houses and other residential properties priced at P3 million will now cost P3.4 million.
Several OFW groups and non-government organizations intend to submit a position paper to the Senate and the Department of Finance (DoF) this week, in opposition of the proposed lifting of the 12 percent VAT on low-cost housing, The Manila Times reported.
“Based on surveys, these OFWs go abroad to be able to buy a home for their family and a P3-million house is what they can usually afford. And then you are removing the VAT exemptions. Isn’t it you are penalizing the OFWs?” Senator Cynthia Villar said in a public hearing in July.
The tax imposition will likely affect minimum wage earners, contractual employees, and overseas workers as these are the target properties of aspiring new home owners.
“These are the houses that our OFWs can afford not immediately, but through years of hard work and sacrifices. Removing the VAT exemptions on low-cost, socialized and economic housing penalizes the poor, while the extremely rich are able to avail of tax loopholes with the help of their connections and legal experts,” ACTS OFW partylist Rep. John Bertiz III was quoted as saying.
Kabalikat ng Migranteng Pilipino (KAMPI) also expressed their opposition to the proposed plans to remove tax exemptions on affordable housing.
“Around 60 percent of those who avail of low-cost housing loans for property less than P3 million are OFWs. They were never consulted about the intent of the TRAIN bill, and many of them are unaware of the DoF’s plan to remove the VAT exemption on affordable houses,” KAMPI founder Luther Calderon said in an interview.
The government is expected to earn P6.2 billion from the expansion of the VAT base by 2018.
Credit: The Manila Times, Inquirer
Photo credit: realestate.ph
