HOR COMPLEX, Quezon City (DWDD) – The House committee on ways and means has approved the tax provisions of a bill seeking to give tax incentives, in the form of tax exemptions and tax deductions, to individuals and corporations giving donations, contributions, gifts and grants to Filipino Olympic medalists.
The committee, in a hearing presided by its vice chairman Rep. Joey S. Salceda (2nd District, Albay), approved the tax provisions contained in House Bill 4054 authored by Speaker Pantaleon D. Alvarez, Majority Leader Rodolfo C. Fariñas, Minority Leader Danilo E. Suarez, and Rep. Jericho B. Nograles (Party-list, PBA), among others.
The committee on youth and sports development chaired by Rep. Conrado Estrella III (Party-list, Abono) earlier approved HB 4054 and endorsed it to the committee on ways and means for the approval of the bill’s tax provisions, namely Sections 5, 6 and 7.
House Bill 4054 provides that any donation, contribution, gift and grant of real or personal property to any Filipino athlete, who has won for the Philippines a bronze, silver or gold medal in the Summer Olympic Games, shall constitute an allowable deduction from the income of the donor for income tax purposes and shall be exempt from donor’s tax in accordance with the National Internal Revenue Code (NIRC), as amended.
The value of each donor’s donations, contributions, gifts, or grants eligible for the tax exemption and deduction shall only be up to an amount not exceeding P1 million for one taxable year. The value of the donation in excess of P1 million shall be subject to donor’s tax and shall no longer be allowed as tax deduction.
The approved Section 5 of HB 4054, titled “Coverage,” provides that only donations, contributions, gifts and grants made within one year made from the date the Olympic medal was won shall be made eligible for the tax incentives. The grant of tax exemption and deduction herein shall not be available for donations, contributions, gifts and grants to medalists in demonstration and exhibition sports events in the Summer Olympic Games.
The approved Section 6 titled “Government Incentives” provides that any award, incentive or grant given by the government, its corporations, institutions, instrumentalities and agencies, to Olympic medalists for winning an Olympic medal shall be exempt from taxes.
Meanwhile, the approved Section 7 titled “Retroactive Application” provides the benefits of the Act shall be applicable to awards, incentives, donations, gifts, contributions to an Olympic medalist in the 2016 Rio de Janeiro Olympics made prior to the enactment of the Act, provided that these are given within one year from the date the medal was won. During the hearing, Nograles said that based on the “Athletes Incentives Act of 2016,” the prizes given to champions are actually tax-exempt. Said bill was passed by Congress in the 16th Congress.
“They are tax-exempt and the prizes and the awards depend on which competition the athletes joined, whether it is an Olympic competition or an Asean competition. That being the case, there is no automatic deduction,” said Nograles.
Nograles added: “I would like to stress that the proposed legislation with the tax exemption is only focused on the donor’s tax, and second it can only be activated if the athlete will win.”
Nograles chided the BIR for its position that is generally against tax exemption. “May I ask the BIR, since Hidilyn Diaz won the Olympics, how much donor’s tax did you collect from her, from those who donated to her, so that you may give us a proper picture on how much the government will actually lose if this legislation is passed,” said Nograles.
Lawyer Nina Asuncion of the BIR Legal Group said the data cannot be provided as they have yet to check their system.
Nograles said the bill being deliberated upon, if it was actually enforced last year, would benefit only one person and that is Hidilyn Diaz. “So you have no idea how much the government could lose,” he told Asuncion.
Nograles said the BIR will lose nothing because usually no one donates to the country’s Olympians. “Our Olympians are not professionals. So if you will talk about equal protection, these people are not out there to make money. They are not professionals, they are athletes who don’t do it for money,” said Nograles.
Nograles said taking into consideration the NIRC provisions, the BIR could liken the donors to non-government organizations (NGOs). “NGOs don’t do it for the money. These people are not professionals and so that’s how maybe we could consider it, that the Olympics does not allow professionals to join the competitions. Hence, donations to non-professionals should be tax-exempt,” he said.
Salceda asked Asuncion on how to impose tax exemptions on donors and athletes in light of the legal provisions of the NIRC that she cited.
“The BIR as a policy shall oppose any measure that will erode its revenues. The BIR also prefers that individual taxpayers be treated similarly in line with the principle of equal protection,” Asuncion said.
Rep. Manuel F. Zubiri (3rd Dist.,Bukidnon) said instead of taxing the people who donate to athletes, the BIR should give incentives to these donors.
Rep. Celso L. Lobregat (1st District, Zamboanga City) a provincemate of Hidilyn Diaz, said the bill seeks to give incentives to Olympic medal winners, not only the Summer Olympics, Winter Olympics but Paralympics as well.
Lobregat said during the hearing of the committee on youth and sports development, the BIR and the Department of Finance (DOF) also objected to the approval of the bill.
“I told the BIR and the DOF to please be humane. How much will the government lose in fact by passing this bill? You might have many donors who will give more than P1 million because the first P1 million is tax- exempt anyway. So, I really see no logic for the BIR and DOF to oppose this bill. The last time we won an Olympic medal was 20 years ago,” Lobregat stressed. CONGRESS / MCAG