Oil depot relocation project may qualify for tax holiday

MANILA, Philippines - At the behest of Petron Corp., the Board of Investments (BOI) will be including the relocation of oil depots in the list of preferred activities that will be receiving income tax holiday (ITH) from the government.

During the public hearing of the 2011 Investment Priorities Plan (IPP) yesterday, Petron Market Planning, Research and Advertising Manager Robert Luz has asked the BOI to include the relocation of oil depots in the IPP for at least five more years because they said that transferring sites and developing new areas are expensive.

At the same time, Luz asked the government to provide assurance for oil firms that they can stay in the area for at least 50 years and not be driven away by residents.

BOI managing head Cristino L. Panlilio said that the oil depots are included in the 2011 IPP. However, he said he cannot guarantee that it will be in the list for five more years. “It will be evaluated annually.”

Meanwhile, a point of contention for the 2011 IPP is the decision of the BOI to lower the ceiling for mass housing projects to P2 million from only P1 million.

Subdivision & Housing Developers Association Inc. chairman Bansan C. Choa said that the P2 million is too low. “I don’t think we can just change the law. Republic Act 7279 defines mass housing as houses worth P2.5 million below.”

Likewise, Choa said that this will decrease the market for mass housing because developers will no longer build houses for the P2.5 million to P3 million segment.

In the 2010 IPP, mass housing projects were defined as houses worth P3 million below.

However, Panlilio said that the lowering of the threshold for mass housing is a good compromise. “You have to understand that the government cannot give away everything.” He said that real estate developers will be able to sell houses to low income households and at the same time collect taxes from higher value properties.

“Besides based on the report of real estate developers like SM Development Corporation the units that they were able to sell were priced at P1.9 million,” Panlilio explained.