BIZ BUZZ: Upscale club, upscale dispute
What is it with membership clubs that cost millions of pesos per share and thousands in dues every month that makes them a hotbed for election disputes?
Perhaps it is the good-old thirst for power that has supposedly put this members-only lifestyle, sports and leisure facility in the Makati central business district at the mercy of a dominant group that is said to be only looking after their interests.
One disgruntled group has claimed that the members of the board are being selected under questionable processes, with one dominant group holding proxies to make sure that they remain in control of the club.
As a result, operations and maintenance of the club have not been up to par for some time. This disarray has extended to the food, prices of which rose by a whopping 30 percent during the pandemic and stayed at lofty levels.
A single serve adobo in the complex now costs about P450, while crispy pata sells for P990 an order.
Senior citizen discounts are likewise frowned upon as they are deemed “too complicated.”
A growing number of members are complaining that all that’s been done in the facility are repairs and maintenance works here and there, the reason why it has deteriorated into its current sorry state, bringing down the value of their membership.
Thus they ask: Can somebody please look into this? Perhaps, the Securities and Exchange Commission?
—Tina Arceo-Dumlao
Higher cap on VAT-free housing
On Halloween, while many people were busy with trick-or-treat and/or preparations to honor the dead, local housing developers were busy meeting with regulators to convince them that it’s high time to raise the P3.2-million value-added tax (VAT) exemption cap for house and lot packages and other residential dwellings.
To recall, the Corporate Recovery and Tax Incentives for Enterprises Act was supposed to adjust the VAT exemption threshold on low-income housing to P4.2 million, but this provision was vetoed by former President Rodrigo Duterte.
This time around, the Marcos administration seems open to the appeal made by the Subdivision and Housing Developers Association (SHDA) and National Real Estate Association, (NREA) —“on behalf of the millions of Filipino residential property consumers”—to issue a Bureau of Internal Revenue (BIR) regulation to jack up the VAT exemption and thus make housing units more affordable.
Biz Buzz heard that the two groups met last week before the long holiday break with key regulators, including Finance Secretary Benjamin Diokno and Housing Secretary Jose Rizalino Acuzar, who both indicated willingness to revisit the VAT threshold. In a letter sent to Diokno prior to the meeting, SHDA and NREA jointly proposed that the cap be adjusted to P4.31 million in line with Section 109(1)(P) of the Tax Code, as amended by the Tax Reform for Acceleration and Inclusion Law and its implementing revenue regulations.
They noted that the current VAT–exempt threshold of P3,199,200 had then been adjusted using the 2010 consumer price index instead of a mandated three-year reassessment. Indexing to inflation, the groups explained, was necessary to “comply with the mandate of the law to make an adjustment on the VAT exemption threshold once every three years, and to ensure consistent and meaningful comparisons of prices and changes over time.”
They said the current ceiling had been in place too long ago—11 years to be exact— and that it was no longer truly representative of the present state of economy.
While the higher cap on housing VAT exemption will take a toll on government revenues, the multiplier effect on the economy and the capital markets makes it worth it, they reckon.
“Needless to say, the ultimate beneficiary of this adjustment would be the Filipino people who would derive more value from their property purchase. We believe that such adjustment would go a long way in addressing the burgeoning housing backlog in the country which currently stands at 6.5 million,” SHDA and NREA said.
And based on what transpired during last week’s meeting, industry sources said Diokno didn’t need a lot of convincing.
This gave the private sector much optimism that the adjustment could be implemented in the coming year (whether or not Diokno keeps his post as top fiscal manager).
