Former House speaker Pantaleon Alvarez on Saturday, July 31, said the decision of the Bureau of Internal Revenue (BIR) to tax awards and winnings of Olympian gold medalist Hidilyn Diaz is “alarmingly unfortunate, and morally and legally wrong.”
“It is unfortunate that the BIR, a few years ago, was quick to forgive and compromise tens of billions of pesos of taxes collectible from a multinational company (MNC) and reduce it to just a few tens of millions of pesos. To make matters worse, the compromise appears to have skirted legal procedures designed to prevent abuse of this option as provided for in Republic Act (RA) 8249, otherwise known as the National Internal Revenue Code (NIRC) of 1997,’’ the Davao del Norte representative said in a statement.
‘’Contrary to what the BIR says, Hidilyn Diaz’s awards and prizes are not taxable. And should the BIR insist that it is, Congress should investigate why its leadership is making certain decisions, compromises included, that are not supported by law,’’ he added.
Alvarez specifically referred to the Diaz’ rewards and gifts that are subject to a donor’s tax of six percent.
He said the BIR “incorrectly” cited the RA 8249, and the RA 10963 or the Tax Reform for Acceleration and Inclusion (TRAIN), which amended NIRC.
‘’In other words, there is no legal basis to tax Hidilyn Diaz’s awards and prizes, not even donor’s tax,’’ he pointed out.
On the other hand, RA 7549, he said, provides for the exemption of Diaz’s rewards from tax.
“Section 1. ALL PRIZES AND AWARDS GRANTED TO ATHLETES IN LOCAL AND INTERNATIONAL SPORTS TOURNAMENTS and competitions held in the Philippines or abroad and sanctioned by their respective national sports associations shall be EXEMPT FROM INCOME TAX: provided, that such prizes and awards given to said athletes shall be DEDUCTIBLE IN FULL FROM THE GROSS INCOME OF THE DONOR: provided, further, that the donors of said prizes and awards shall be EXEMPT FROM THE PAYMENT OF DONOR’S TAX,” Alvarez stressed.
The former House chief said law clearly exempts prizes and awards from being subject of both income and donor’s tax.
‘’That’s how important this piece of legislation is. The BIR, if it can be generous to MNCs and reduce their tax dues through questionable compromises, should – at the very least – be mindful insofar as how it treats the awards and prizes of our national athletes who have worked hard and given honor to our country. Our athletes deserve better,’’ he maintained.