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DATE:
Republic of the Philippines
HOUSE OF REPRESENTATIVES \ H

Quezon City

SEVENTEENTH CONGRESS
First Regular Session

One 4492

House Bill No.,

INTRODUCED BY: REPRESENTATIVE CRISTAL L. BAGATSING

EXPLANATORY NOTE
Article XIll, Section 9, of the 1987 Constitution provides that:

“The State shall, by law, and for the common good, undertake, in cooperation with
the private sector, a continuing program of urban fand reform and housing which
will make available at affordable cost decent housing and basic services to
underprivileged and homeless citizens in urban centers and resettlement areas.

x x x“

One of the hindrances to this constitutional provision to make available at affordable cost
decent housing to underprivileged is the high cost of housing materials or lease of construction
equipment intended for low cost or socialized housing, Although RA 7279 have already exempt
the sale of real properties utilized for low-cost and /or socialized housing from VAT the same
however reveals that the backlog for housing keeps on adding and presently estimated at four
million families nationwide.

By making the sales of construction materials and lease of construction equipment
exempt from VAT transactions will enable the end user or the beneficiary for low cost and/or
socialized housing afford the cost for decent housing. Thus, realizing the very spirit of the social
justice provision of the 1987 Constitution,

Hence, the passage of this bill is earnestly requested.



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
First Regular Session

Hoald Bit No. 4492

INTRODUCED BY: REPRESENTATIVE CRISTAL L. BAGATSING

AN ACT
EXEMPTING SALES OF CONSTRUCTION MATERIALS AND LEASE OF CONSTRUCTION EQUIPMENT
INTENDED FOR SOCIALIZED HOUSINGPROJECTS FROM VALUE ADDED TAX AMENDING FOR THE
PURPOSE OF SECTION 109 OF THE NATIONAL INTERNAL REVENUE CODE

Be it enacted by the Senate and House of Representatives of the Philippines in Congress
assembled:

SECTION 1. Section 109 of the National internal Revenue Code is hereby amended to read as
follows:

“Sec. 109, Exempt Transactions.- The following shall be exempt from value-added tax:

{a) Sale of non-food agricultural products, marine and forest products in their
original state by the primary producer or the owner of the land where the same

are produced,

(2). Sale or lease of goods or properties or the performance of services other
than the transactions mentioned in the preceding paragraphs, the gross annual
sales and/or receipts do not exceed the amount of Five hundred fifty thousand
pesos (P550,000): Provided. That not later than January 31” of the calendar year
subsequent to the effectivity of Republic Act No. 8241 and each calendar year
thereafter, the amount of Five hundred fifty thousand pesos (550,000) shall be
adjusted to its present value using the Consumer Price Index, as published by the
National Statistics Office (NSO),


(AA) SALE OF CONSTRUCTION MATERIALS OR LEASE OF CONSTRUCTION
EQUIPMENT USED FOR LOW-COST AND SOCIALIZED HOUSING AS DEFINED UNDER
REPUBLIC ACT NO. 7279. OTHERWISE KNOWN AS THE URBAN DEVELOPMENT AND.
HOUSING ACT OF 1992 AND OTHER RELATED LAWS;

The foregoing exemptions to the contrary notwithstanding, any person whose sale
of goods or properties or services which are otherwise not subject to VAT, but
who issues a VAT invoice or receipt therefor shall, in addition to his liability to
other applicable percentage tax, if any, be liable to the tax imposed in Section 106
or 108 without the benefit of input tax credit, and such tax shall also be recognized
as input tax credit to the purchaser under Section 110, all of this Code.”

SECTION 2. Repealing Clause. All laws, decrees, executive orders, proclamations, rules and
regulations and other issuances or parts thereof, inconsistent with the provisions of this Act are

hereby repealed or modified accordingly.

SECTION 3. Effectivity. This Act shall take effect fifteen (15) days after its complete publication in
at least two (2) newspapers of general circulation.

Approved,