FINANCE Secretary Carlos G. Dominguez III thumbed down the proposed measure to make tax-exempt the monetary donations and rewards given to national athletes and coaches who compete or win in international sports competitions.
A day after House Committee on Ways and Means and Albay Rep. Joey Salceda filed the “Hidilyn Diaz Act of 2021,” Dominguez said the Department of Finance is not amenable to the measure because it is only fitting that citizens and residents comply with their duty to society.
“All Philippine citizens and residents have an obligation to share in the cost of the provision of public goods to society,” Dominguez told reporters in a message.
The bill filed by Salceda aims to grant tax exemption on “rewards, bonuses and other forms of emoluments” given to national athletes and coaches who compete or win in international sports competitions. This, after Diaz bagged the country’s first-ever Olympic gold medal in the women’s 55 kg weightlifting competition in
Tokyo on Monday.
Salceda’s proposal seeks to amend Republic Act 10699, or the National Athletes and Coaches Benefits and Incentives Act.
The Senate is also looking into the possibility of filing a resolution to formally urge the BIR to exempt Diaz’s winnings as an Olympic gold medalist.
In a statement on Thursday, the Bureau of Internal Revenue clarified the P10 million cash incentive that Diaz will be receiving from the Philippine government through the Philippine Sports Commission after winning the Olympic gold medal is excluded from income tax under Section 32(B)(7)(d) of the Tax Code.
Also excluded from the computation of Diaz’s gross income under Section 32(B)(3) of the Tax Code are the donations given to her by businesses, private individuals and entities. However, the BIR clarified that this “presupposes that the generous donors have already paid the donor’s tax on these items.”
“It’s a good thing that the TRAIN (Tax Reform for Acceleration and Inclusion) Law has finally lowered the donor’s tax rate to 6 percent in excess of P250,000. Otherwise, the maximum donor’s tax would be P1,004,000 + 15 percent in excess of P10 million,” it said.
“We congratulate Hidilyn Diaz and the Philippine team, and we hope for the best for the Filipino athletes still in the running to earn their spot at the Olympic podium,” it added.
Despite the position of the DOF, Salceda said his committee will still deliberate all tax proposals as mandated by the Constitution.
If his proposal is not passed, Salceda said, Diaz will pay P14.5 million in tax.
According to Salceda, the Tax Code excludes from gross income all prizes and awards granted to athletes in local and international sports competitions and tournaments whether held in the Philippines or abroad and sanctioned by their national sports associations.
Under Section 24 (B) (1) of the National Internal Revenue Code, Salceda said a final tax at the rate of 20 percent is hereby imposed upon on interests, royalties, prizes, and other winnings derived from sources within the Philippines.
“There is an ambiguity that is capable of being argued that anything granted to the athletes outside what is in the law or granted by the organizers themselves is not an award but a “gift” since it is granted in gratuity. So, we want to close the question of whether this is taxable,” he added.
“After the past two [controversial] RRs [Revenue Regulations], Congress wants to close any ambiguity,” he said.
He said his bill closes the question by making the definition broader.
The bill excludes from taxes “rewards, bonuses, and other forms of emoluments in favor of national athletes and coaches” and not just “awards” or “prizes.”
“Usually, what you get from the organizers is the ‘prize.’ Anything else is just a bonus,” he said.
“Likewise, the gifts are still subject to [6 percent] donor’s taxes, and the bill will address this by exempting these donations,” he added.
Among the incentives and rewards expected to be received by Diaz are: P10 million cash as mandated by Republic Act 10699, P10 million from San Miguel Corporation, P10 million from MVP Sports Foundation, P3 million from Deputy Speaker Mikee Romero of 1-PACMAN Party-list, P2.5 million from Zamboanga City, P5-million cash and free fuel for life from Phoenix Petroleum, P14-million residential condominium unit in Eastwood, Quezon City from Megaworld, P4-million house and lot from Century Properties; and a house and lot in Tagaytay from Philippine Olympic Committee.
Diaz will also receive lifetime free flights from AirAsia Philippines and 80,000 free miles per year for life from Philippine Airlines.
Drilon weighs in
Meanwhile, Senate Minority Leader Franklin M. Drilon said that Olympic-related prizes, awards and incentives given to Olympic Gold Medalist Hidilyn Diaz should be tax exempt.
“All prizes, incentives and perks given to Hidilyn for winning the country’s first Olympic gold should be tax-exempt. However, the rules with regard to the treatment of prizes, awards and incentives received by Filipino athletes are not clear. It is time for the BIR to issue a clarification and settle the matter in favor of the athletes,” Drilon said Thursday.
“I urge the BIR to affirm the interpretation that all the awards and incentives should be tax exempt,” he added.
“It will be an incentive for our athletes to do even better and inspire future Hidilyn Diazes who will give honor and pride to the nation,” he added.
Drilon said that he hopes Diaz’s victory in the Tokyo Olympics will pave the way for more benefits for atheletes, including augmentation of their allowances and additional incentives.
“Consistent with the objectives of RA 10699, we must promote excellence in sports by looking after the welfare of national athletes and coaches competing for the country and by providing benefits and incentives for national athletes and other athletes who win in international sports competitions and bring honor and recognition to the country,” Drilon said.
Drilon recalled how Hidilyn trained with makeshift weights made out of broomsticks and duffel bags in preparation for the Tokyo Olympics.
“Her resourcefulness and resolve to win are admirable. Hidilyn Diaz has shown us that with heart and perseverance, the Filipino can emerge triumphant. We can prevail and overcome,” Drilon said.