Remove Tax on Cash Donations (Facepalms BIR)

I just found out that the government is actually making a killing out of the cash donations that are pouring in for the Ondoy relief operations. In a Senate hearing spearheaded by veteran lawmaker and fiery Senator Miriam Defensor Santiago, BIR Commissioner Sixto Esquivias IV explained that donations made to the private sector are subject to tax based on the Tariffs and Customs Code. The commissioner didn’t say how much percentage the government actually gets from the cash donations. Even if we assume that it’s just around 5%, the government stands to make a a lot of moolah just on the cash aid given by other countries.

On a regular day, I don’t have a problem with tax on donations because it might be prone to abuse. However in times of crisis we should give allowances so that the full benefit of the donations will be felt by the victims. This is for the sake of both the giver and the receiver. Why the giver? Because personally I’d be pissed if part of the money I give for charity is just pocketed by corrupt government officials (which is probably what will happen).

In the hearing, Santiago even stressed that several multinationals and wealthy individuals are holding back their help because they’re hesitant due to the donor’s tax. I would agree with her 100%. If I had more cash to give, I’d really think twice because I know deep in my heart that part of the money I’m giving will go to corruption. It will probably pay for a house in the US or maybe a 1M dinner in New York (*whistles innocently*).

Here’s the article from GMA NEWS:

MANILA – Sa kabila ng kalamidad na dulot ng bagyong “Ondoy,” hindi pa rin libre sa buwis ang mga perang donasyon na idadaan sa mga pribadong organisasyon, ayon sa opisyal ng Bureau of Internal Revenue (BIR).

Sa pagdinig nitong Huwebes ng Senate sub-finance committee na pinamunuan ni Sen Miriam Defensor Santiago, sinabi ni BIR Commissioner Sixto Esquivias IV, ang pagkuha ng buwis sa donasyon sa pribadong sektor ay nakapaloob sa Tariffs and Customs Code.

“Donations done straight to private individuals are subject to donor’s tax,” paliwanag ni Esquivias sabay paglilinaw na libre sa buwis ang mga donasyon na ipadadaan sa gobyerno.

Hindi sinabi ni Esquivias kung ilang porsiyento ang kukuning buwis sa halaga ng donasyon na ipagkakaloob sa pribadong sektor na ibibigay naman sa mga biktima ng kalamidad.

Isinagawa ang pagdinig dahil sa mungkahi ni Santiago na alisin na muna ang buwis na nakapataw sa mga donasyon na ipadadaan sa pribadong sektor.

Sa resolusyon na An Act Providing for Tax Relief in Times of Calamity, sinabi ni Santiago na sakop nito ang libreng pagbabayad sa real property tax sa loob ng dalawang taon sa mga gusali na nasira ng kalamidad.

“The real property tax in the affected area shall not be assessed and collected for two fiscal years, starting from the date of the declaration of a state of calamity,” nakasaad sa resolusyon.

Idinagdag niya na dapat malibre rin sa buwis ang donasyon na ipinapadaan sa pribadong sektor katulad ng mga foundations dahil mayroon mga nagdududa kung sa gobyerno ipadaaan ang tulong na kanilang ibibigay.

“There many many organizations that wants to make donations for the victims of the last typhoon. What is deterring them is the prospect of having to pay donor’s tax. They are afraid that the tax will eat into the donations so in effect they will be just giving money to the public treasury which might be stolen by corrupt public officials,” paliwanag ni Santiago.

Umaasa si Santiago na maipapasa ng Senado sa Lunes ang naturang resolusyon upang ipaabot ang saloobin ng mga mambabatas para pansamantalang huwag ipatupad ang probisyon sa batas sa pagkuha ng buwis sa mga donasyon.

“Multinationals and some individuals wanted to give huge sums to organization to help aid the calamity victims. But they would have to face paying a hefty sum for donor’s tax,” pahabol niya. – GMANews.TV

I fully support Senator Miriam Defensor Santiago on this resolution. Regardless of whatever party you’re running for in reelection Madame Senator, you have my vote.

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