Finance Secretary Carlos Dominguez III said Thursday the policy reforms being carried out by the Duterte administration will clear the way to “dramatic innovations” in the real estate sector that will help fuel its robust growth in the post-pandemic era.
Dominguez said these reforms include the Corporate Recovery and Tax Incentives for Enterprises Law (CREATE), which has provided hefty corporate income tax (CIT) reductions and set a more flexible fiscal incentives system for businesses; and the proposed Real Property Valuation and Assessment Reform Act (RPVARA), which seeks to put in place internationally accepted standards in property valuation.
He likewise cited the Duterte administration’s initiatives to fix the flaws in the regulatory framework of the Real Estate Investment Trust (REIT) Law, which now allows property developers to raise billions of pesos in additional investments; and the inevitable rapid shift to the digital economy as the other key factors that would further propel the growth of the Philippine real property sector.
“As our economy reemerges after a period of great difficulty, we will expect an even livelier real estate market with these reforms in place. The intensive use of new digital technologies will add even more vitality to this market,” Dominguez said at the virtual launch of the Property Technology Consortium of the Philippines (PropTech).
According to its proponents, PropTech aims to modernize and propel the country’s real estate industry into the digital age.
Dominguez welcomed this “exciting development” in the real estate industry as he has long been advocating for a rapid shift to digital technologies, both in government and in the private sector.
“I wish the industry players in the Property Technology Consortium all the best as you revolutionize the Philippine real estate industry through sustainable, resilient, smart and innovative technologies.”
He said the transition to the digital age “will enable more intensive interaction with consumers, quicker sharing of knowledge, and more efficient processing.”
Dominguez cited, for instance, the early move towards digitalization of the government’s revenue agencies, which ensured their full functionality despite the ongoing pandemic.
As a result, not only were the Bureaus of Internal Revenue (BIR) and of Customs (BOC) able to collect much-needed revenues amid the pandemic, they also succeeded in making the processes more convenient for taxpayers, he said.
Dominguez had pushed the BIR and BOC to accelerate the digitalization of their transactions even before the pandemic struck last year.
For the filing and paying of the 2020 income tax returns, 99.63 percent of taxpayers did so electronically, the BIR earlier said.
“The new economy we expect to build as we push ahead with the economic recovery will be driven by new information and communications technologies. The real estate sector will inevitably be drawn into this process,” Dominguez said.
“The use of modern technologies will allow real estate players to reach a wider segment of digitally empowered consumers. It will make housing transactions more transparent and efficient,” he added.
Aside from applying digital tools to innovate and expand their reach to consumers, Dominguez also urged the real estate sector to help “redesign” a post-pandemic economy that is ecologically sustainable by building structures and spaces that are climate-resilient and use “green” technologies.
Dominguez said the PropTech can take advantage of the rationalization of the fiscal incentives system under the CREATE as this law incentivizes research and development (R&D) by granting expenses for these activities with 100-percent tax deduction.
CREATE also provides the highest level of incentives for the generation of new knowledge; intellectual property registered and licensed in the Philippines; commercialization of patents, industrial designs, copyrights, and utility models, he said.
“I am sure that some of the activities this consortium will be engaged in stand to benefit from the new fiscal incentives regime under the CREATE Law,” Dominguez said.
D0minguez also encouraged PropTech to participate in REITs, which will not only help ensure the robust growth of the property sector beyond the pandemic, but will also open attractive and dependable investment opportunities for the average Filipino.
Meanwhile, a credible and transparent valuation system under the RPVARA, complemented by the use of digital tools, will boost investor confidence in the land and real estate markets, Dominguez said.
More on TaxReform News
PHL strong enough to “weather” eco storms—Dominguez →Date Posted: November 1, 2018
The Philippines is strong enough to “weather the storms” looming over its economy, given that … Continue reading PHL strong enough to “weather” eco storms—Dominguez
Gov’t on track to reduce poverty rate to 14% or lower by 2022—Dominguez →Date Posted: February 16, 2020
The Duterte administration remains fully committed to reduce poverty incidence to just 14 percent or … Continue reading Gov’t on track to reduce poverty rate to 14% or lower by 2022—Dominguez
DOF says PHL possibly losing P43-B yearly to corporate abuse of transfer pricing schemes →Date Posted: October 2, 2018
The government is losing an estimated P43 billion a year in tax leakages to firms that possibly exploit the country’s convoluted corporate income tax (CIT) system and abuse transfer pricing schemes, according to the Department of Finance (DOF).
DOF to urge Congress to pass higher tobacco tax rates to further discourage smoking, raise more healthcare fundsDate Posted: April 29, 2019
The Department of Finance (DOF) will “try its best” until the last minute to convince the Congress to impose new “sin” tax rates on tobacco products that will make cigarettes pricey enough to further discourage smoking, especially among teenagers.