BIR clarifies tax exemption rule for socialized housing projects
The Bureau of Internal Revenue clarified that the tax relief for socialized housing projects covered only buildings that were developed for the poor.
The BIR issued Revenue Memorandum Circular No. 32-2012 dated July 16 amid attempts to take advantage of a law that exempts contractors and developers of such projects from paying income tax, value added tax and other related levies, even if their projects are not qualified under the law.
In RMC 32-2012, Revenue Commissioner Kim S. Henares said the Urban Housing and Development Act of 1992 (or Republic Act No. 7279) defined socialized housing as houses and lots, or homelots, that were developed for the underprivileged or the homeless.
Tax exemption “is limited to the construction of homelots with the view of reducing the cost of housing units for the benefit of the underprivileged and homeless and to encourage greater private-sector participation in socialized housing,” Henares said.
The BIR chief reiterated that the agency’s issuances were meant to clarify the coverage of the tax rules and to stop unqualified parties from taking advantage of the tax breaks.
“The development and construction of classrooms, school buildings, multipurpose halls and covered courts, and livelihood centers are not qualified for the tax incentives,” Henares said.
Get Inquirer updates while on the go, add us on these chat apps:
Disclaimer: The comments uploaded on this site do not necessarily represent or reflect the views of management and owner of INQUIRER.net. We reserve the right to exclude comments that we deem to be inconsistent with our editorial standards.
To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.
Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:
c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City,Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94