VAT Ruling No. 005-98

January 29, 1998 VAT RULING NO. 005-98 Section 20 RA 7279 053-97-05-98 National Housing Authority Elliptical Road, Diliman Quezon City Attention: Mr . Neofito A . Hernandez Manage Regions IV-A and V Gentlemen : This refers to your letter dated 12 September 1997 requesting for and in behalf of 3 A's Construction, a single proprietorship owned by Priscilo P. Agdamag, an exemption from the payment of the value added tax (VAT) as a contractor undertaking the land development of the Daet Resettlement Project, Phase II, located at Barangay Alawihao, Daet, Camarines Norte, a socialized housing project of the National Housing Authority (NHA). prll In reply, please be informed that pursuant to Sec. 20 of RA 7279, pertinent portion of which reads: SEC. 20. Incentives for Private Sector Participating in Socialized Housing . To encourage greater private sector participation in socialized housing and further reduce the cost of housing units for the benefit of the underprivileged and homeless, the following incentives shall be extended to the private sector. xxx xxx xxx "(d) Exemption from payment of the following: xxx xxx xxx "(3) Value added tax for the project contractor concerned: xxx xxx xxx Such being the case, Priscilo P. Agdamag, doing business under the name 3 A's Construction, the project contractor engaged by NHA to undertake land development and construction of socialized housing units at the Daet Resettlement Project, Phase II, is exempt from the payment of the value added tax on receipts derived from said project. However, purchases of goods/articles by the said project contractor shall be subject to the value added tax, even if the said purchases are to be used for the socialized housing project. This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be disclosed that the facts are different, then this ruling shall be considered null and void (BIR Ruling No. 190-95 dated July, 1995). LLpr Very truly yours, SIXTO S. ESQUIVIAS IV Deputy Commissioner Legal & Enforcement Group