Government to lose billions with REIT law

Published by rudy Date posted on December 9, 2009

MANILA, Philippines – The Department of Finance (DOF) has reiterated its previous position that a bill seeking to grant hefty tax perks to publicly-listed companies operating as a real estate investment trust (REIT) would translate to billions in yearly losses for the government.

In a letter to Malacañang, the Finance department reiterated that the REIT bill would mean annual foregone revenue losses of P2.7 billion once it is fully implemented. For the first year of implementation alone, the government expects to lose P1 billion.

Malacanang is set to sign the REIT bill soon following ratification by the Senate and the House of Representatives last September.

Sources at the Finance department conceded that the measure would be implemented soon following the ratification by Congress and the scheduled signing of President Arroyo. Fiscal authorities nonetheless reiterated the amount of revenues that would be lost once the measure is fully implemented.

The Department of Finance was able to trim down its projected annual revenue losses from the soon-to-be-enacted law providing incentives on investments related to financing and big-ticket real estate projects to P2.7 billion from the original estimate of P5.3 billion after Congress heeded some of the recommendations of the Finance department to reduce the tax perks.

Nonetheless, the revenue losses are still in billions, sources said.

A company operating as a REIT finds investors and buys real property. It also gives each investor either a percentage interest in the property itself or an interest in a loan secured by a mortgage or deed of trust on the property. The loan is usually for developing property and to build upon it, and then there is a division of profits upon sale, if there is a profit.

According to the ratified REIT measure, overseas Filipinos investing in REITS are exempt from payment of dividend tax for seven years from the effectivity of the law. The transfer of properties to REIT companies is also entitled to lower documentary stamp tax (DST) by 50 percent. Furthermore, the measure also grants lower creditable withholding tax (CWT) of one percent on income payments to the REIT. –Iris C. Gonzales (The Philippine Star)

July 2025

Nutrition Month
“Give us much more than P50 increase
for proper nutrition!”

Invoke Article 33 of the ILO Constitution
against the military junta in Myanmar
to carry out the 2021 ILO Commission of Inquiry recommendations
against serious violations of
Forced Labour and Freedom of Association protocols.

Accept National Unity Government (NUG)
of Myanmar.  Reject Military!

#WearMask #WashHands #Distancing #TakePicturesVideosturesVideos

Time to support & empower survivors. Time to spark a global conversation. Time for #GenerationEquality to #orangetheworld!

July


3 July – International Day of Cooperatives
3 Ju
ly – International Plastic Bag Free Day
 
5 July –
World Youth Skills Day 
7 July – Global Forgiveness Day
11 July – World Population Day 
17 July – World Day for
International Justice
28 July – World Nature Conservation Day
30 July – World Day against Trafficking in Persons 


Monthly Observances:

Schools Safety Month

Nutrition Month
National Disaster Consciousness Month

Weekly Observances:

Week 2: Cultural Communities Week
Micro, Small, and Medium Enterprise
Development Week
Week 3: National Science and
Technology Week
National Disability Prevention and
Rehabilitation Week
July 1-7:
National Culture Consciousness Week
July 13-19:
Philippines Business Week
Week ending last Saturday of July:
Arbor Week

 

Daily Observances:

First Saturday of July:
International Cooperative Day
in the Philippines

Categories

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Ut elit tellus, luctus nec ullamcorper mattis, pulvinar dapibus leo.