Sen. Edgardo Angara yesterday said Internal Revenue Commissioner Kim Henares appears to have “taken over” the power of Congress by virtually rewriting the Real Estate Investment Trust (REIT) law long passed by the Senate and the House and enacted by Malacañang.
Angara, the law’s principal author, cited reports about the insistence of the Bureau of Internal Revenue in imposing stringent tax requirements in the law’s implementing rules that were not included in the measure that, he noted, could have raised over P43 billion in the capital markets if implemented earlier.
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He said the REIT was crafted by Congress to enable the public to invest in income-generating real-estate assets and eventually derive a return from it. The early establishment of the REIT in the country would have “provided liquidity to the real-estate market, unlocked capital and eventually helped the Philippine economy” as envisioned by lawmakers when they passed the law.
“She is usurping the power of Congress,” Angara told the BusinessMirror, citing her insistence on imposing the 12-percent value-added tax on REIT transactions, a move seen to have dampened interest of major developers such as Ayala Land Inc., Robinsons Land Corp. and SM Prime Holdings Inc.
Besides the imposition of the VAT that was seen to increase the cost of establishing REITs, the Department of Finance also insisted requiring REITs to sell 67 percent of its outstanding capital in three years, prompting developers to shelve plans to avail themselves of the REIT law.
Angara said that Henares, in imposing the conditions, was effectively “blocking the implementation” of the REIT law.
He also accused Henares of “impounding a law that has already been thoroughly debated in both chambers of Congress.”
He said that if the administration really wanted to amend the REIT law to accommodate the concerns raised by Henares, “let the President write to Congress about it and we will pick it up from there.”
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