THE House of Representatives’ 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 Salceda (2nd District, Albay), approved the tax provisions contained in House Bill (HB) 4054 authored by Speaker Pantaleon Alvarez, Majority Leader Rodolfo Fariñas, Minority Leader Danilo Suarez, and Rep. Jericho 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.
HB 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 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, entitled “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, entitled “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. The bill was passed during 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,” he said.
“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 added.
He chided the Bureau of Internal Revenue [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 asked Asuncion.