Hidilyn Diaz. Photo by Reuters

MANILA, Philippines – The House Committee on Youth and Sports Development has recently approved a bill seeking to give incentives to donors of athletes who have won medals in the Summer Olympic Games.

House Bill 4054 seeks to provide tax incentives to individuals and corporations which give donations, contributions, and grants to Filipino athletes who have won in the Summer Olympic Games.

HB 4054 was approved by the committee chaired by Rep. Conrado M. Estrella III (Party-list, Abono).

The bill is a proposal of House Speaker Pantaleon D. Alvarez (1st District, Davao del Norte), Majority Leader Rodolfo C. Fariñas (1st District, Ilocos Norte), Minority Leader Danilo E. Suarez (3rd District, Quezon), Committee on Ways and Means chairman Rep. Dakila Carlo E. Cua (Lone District, Quirino), Estrella, Rep. Celso L. Lobregat (1st District, Zamboanga City), 1-Pacman Party-list Reps. Michael L. Romero and Enrico A. Pineda, and PBA Party-list Reps. Jericho Jonas B. Nograles and Mark Aeron H. Sambar.

Lobregat said that through the tax breaks and incentives, the people will be encouraged to support the athletes' endeavors as they try to bring more pride and honor to the nation.

Deputy Speaker and Batangas Second Rep. Raneo E. Abu proposed to the body to allow the Committee on Ways and Means, where the bill will be subsequently referred, to discuss the issue of tax incentives since the contentious issue in the proposal is the amount of the tax exemption.

Lobregat noted that it is only after 20 years that the Philippines was once again represented in the podium of the Olympic Games.

"Hidilyn Diaz… won a silver medal in weightlifting in the Rio Olympics and brought honor and glory to the country," said Lobregat. "Hidilyn's victory and experience in her sport will be very valuable in developing and molding future Filipino Olympic medalists."

"Needless to say, Diaz and other Filipino Olympic heroes like her deserve not only our praise but our support," he added.

The bill provides that any donation, contribution, gift and grant of real and 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 provisions of the National Internal Revenue Code, 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 exceed P1 million for one taxable year.

The value of the donation in excess of P1 M shall be subject to donor's tax, and shall no longer be allowed as tax deduction.

The amount of any donation of property, other than money, shall be based on the acquisition cost of the property.

Donations, contributions, or gifts shall be allowable as deduction under the Act only if verified in accordance with existing rules and regulations of the Bureau of Internal Revenue (BIR) for proving charitable donations, contributions, or gifts for purpose of tax deductions.

Any product or brand endorsement, personal services, or other consideration of any nature given in exchange for the purported donation shall automatically make such purported donation ineligible for the incentives under this Act.

Only donations, gifts, contributions, and grants made within one year from the date the Olympic medal was won shall be eligible for the tax incentives as provided under the bill.

Any award, incentive, or grant given by the government, its corporations, institutions and agencies to Olympic medalists for winning an Olympic medal shall be exempt from taxes.

The benefits of this Act shall be applicable to awards, incentives, gifts, donations, contributions and grants to an Olympics made prior to the enactment of this Act, provided that these are given within one year from the date the medal was won.

Prior to the approval of the bill, Rep. Abraham N. Tolentino (7th District, Cavite) was considering the idea of increasing the amount to more than P1 million.

"I'm thinking of increasing the amount because the Olympic year is every four years and after four years, the P1 million may be too small and after so many Olympic years, the value of P1 million may be small," Tolentino said.

But Lobregat explained the P1 million will be per individual or per corporation.

"So if you have 10 corporations giving P1 million each, all those 10 corporations will be covered. It is not a maximum of P1 million. So if there are corporations that will give P500,000 or P200,000, any corporation or individual giving P1 million and below is covered. I think the amount is already sufficient," he said.

Rep. Mohamad Khalid Q. Dimaporo (1st District, Lanao del Norte) also favored a bigger amount of tax break to donors.

"I proposed that we amend the bill to have a bracket system that in every four years, we increase the amount by P500,000 if that is the possible solution to the question," said Dimaporo.

Resource persons from the BIR and the National Tax Research Center (NTRC) expressed their objection and reservation to the bill as it poses to minimize or lessen the collectible taxes that otherwise will go to the government and that the tax break might be abused.

Rep. Gerald Anthony V. Gullas Jr. (1st District, Cebu) said the committee should vote on the concept of youth and sports and let the committee on ways and means to vote on the concept of ways and means.

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