The Department of Finance is batting for the removal of mass housing projects in the latest of the annual Investment Priorities Plan (IPP), saying that its continued inclusion on the list of tax perk beneficiaries poses an “administrative nightmare.”
In a four-page position paper signed by Finance Undersecretary Jeremias N. Paul Jr., the DOF expressed belief that this became the situation—both for the tax bureau and the Board of Investments (BOI) itself—after the term “mass housing” was expanded to cover condominium projects.
Paul noted that mass housing projects have been listed every year in the IPP for almost a decade now mainly because of the drive to bridge the housing supply gap.
Initially, only subdivision projects were covered, but the definition of the term was expanded in 2007 to cover vertical or multi-story projects.
In 2008, the BOI mandated that, for a subdivision project to become a preferred investment activity, at least 20 percent of the total land area must be devoted to mass housing.
At the same time, 20 percent of the total cost of a condominium project must cover the provision of affordable units for the lower-income market.
“We believe that this [system] which covers both registered and nonregistered activity in one and the same condominium project poses an administrative nightmare for the tax administrator and even the BOI which processes the tax incentive claims,” Paul said.
He noted that some sectors have long been mainstays on the IPP list, including shipbuilding, iron and steel, and motor vehicle manufacturing.
“It would have been helpful for us to be presented with in-depth evaluation of how inclusion in the IPP has actually helped these industries,” he said.