To tax or not to tax? BIR issues statement on Hidilyn Diaz's Olympic winnings
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The tax bureau gives the lowdown on the said tax issue.
As the number of prizes continues to pile up for Hidilyn Diaz, so are the questions on whether all her rewards will be subjected to tax cuts from the state.
Hidilyn on Monday, July 26, ended the Philippines' 97-year gold medal drought in the Olympics after outlifting Liao Qiuyun of China in the women's 55-kilogram weightlifting competition at the Tokyo Olympics.
The inspiring win instantly catapulted Hidilyn to hero status, adored by her fellow Filipinos from around the world.
Along the victory came the deluge of prizes in the form of cash and non-cash incentives from the private and public sectors, all commending the Zamboanga City native for the historic feat.
As of today, Hidilyn is assured to get P43.5 million cash windfall from her victory. That's not including the other incentives given to her like properties and lifetime free airline flights, among others.
In a statement issued today, the Bureau of Internal Revenue (BIR) said that Hidilyn's prizes won't be taxed as directed by law.
“The P10 million cash incentive mandated under Republic Act No. 10699, shall be considered an exclusion from gross income by virtue of Section 32 (B)(7)(d) of the Tax Code,” the BIR said.
“The donations given to her by businesses, private individuals, and entities shall also be excluded from the computation of her gross income under Section 32 (B) (3) of the Tax Code.”
However, the donors - businesses, private individuals, and entities - are mandated to pay a donor's tax.
The BIR describes donor's tax on its website as “a tax on a donation or gift, and is imposed on the gratuitous transfer of property between two or more persons who are living at the time of the transfer.”
The BIR statement added, “It's a good thing that the TRAIN Law has finally lowered the donor's tax rate to 6% in excess of P250,000. Otherwise, the maximum donor's tax would be P1,004,000 + 15% in excess of P10 million.”
It went on to applaud Hidilyn and all the athletes who are competing and representing the country in the ongoing Olympics.
“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.”
Read the BIR's full statement here:
Photo by: BIR
Meanwhile, check out the list of incentives Hidilyn Diaz will receive:
