MANILA, Philippines — The Bureau of Internal Revenue (BIR) has “no legal basis” to tax the earnings and rewards of Olympic gold medalist and weightlifter Hidilyn Diaz and other Olympic winners.
Davao del Norte Rep. and former Speaker Pantaleon Alvarez said the BIR “incorrectly cited” provisions in the Tax Code and Republic Act No. 10963, or the Tax Reform for Acceleration or Inclusion (Train) law, on awards and prizes in sports competitions and donors’ taxes.
“The BIR, however, erroneously cites the wrong law and, further, a statute which exempts awards and winnings from both income and donor’s tax already exists. In other words, there is no legal basis to tax Hidilyn Diaz’s awards and prizes, not even donors’ tax,” he said.
The solon cited the 1992 RA 7549, which exempted from taxation all prizes and awards gained from local and international sports competitions, including donors’ tax.
“RA 7549 clearly exempts prizes and awards from being subject of both income and donors’ tax [ncluding those given by private corporations or persons] and it even retroactively takes effect to cover the Southeast Asian Games a year before said law took effect,” he said.
Alvarez added: “Contrary to what the BIR says, Hidilyn Diaz’s awards and prizes are not taxable. 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.”
The former Speaker said it was “unfortunate” how the BIR “was quick to forgive and compromise” billions of pesos in taxes due from a multinational company and reduce it to “just a few tens of millions of pesos.”
He did not name the firm, but said the “compromise appears to have skirted legal procedures designed to prevent abuse of this option” in the 1997 National Internal Revenue Code.
“This is alarmingly unfortunate. And it is both morally and legally wrong,” Alvarez said of the BIR’s statement that rewards pledged for Diaz may be subject to donors’ tax.
“The BIR, if it can be generous to [multinational coroporations] 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 said.
Diaz is expected to receive at least P33 million in rewards pledged by businesses, politicians and other entities following her dramatic, winning performance at the Tokyo Olympics.
This sum includes a P10-million incentive from the government as mandated by RA 10699. The BIR said this incentive might be tax-exempt under the 1997 Tax Code.
President Rodrigo Duterte himself pledged another P3 million for her and House Deputy Speaker Mikee Romero promised P3 million.