BIR: Hidilyn Diaz won’t be taxed for rewards, but donors need to pay tax

The Bureau of Internal Revenue (BIR) on Thursday clarified the taxability of the windfall of financial rewards and other incentives that were pledged to weightlifter Hidilyn Diaz for winning the Philippines’ first-ever Olympic gold medal.

“In times when a fellow Filipino represents the Philippines and wins in the international arena, the BIR always gets asked on the taxability of their prizes—be it a medal, a crown, or cash,” it said in a statement.

The BIR said that the P10 million cash incentive for Olympic gold medal winners from the Philippine government 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 taxman also noted that certain businesses, politicians, and other entities have also pledged cash, real estate, free airfare and other rewards to Diaz.

These items, the bureau said, “shall also be excluded from the computation of her gross income under Section 32(B)(3) of the Tax Code”—presupposing that the donors will already have already paid the donor’s tax on them.

“It’s a good thing that the TRAIN (Tax Reform for Acceleration and Inclusion) Law has finally lowered the donor’s tax rate to 6% in excess of P250,000,” the BIR said.

“Otherwise, the maximum donor's tax would be P1,004,000 + 15% in excess of P10 million,” it said.

House committee on ways and means chairperson Joey Salceda on Wednesday filed House Bill 9891 or the Hidilyn Diaz Act of 2021, which aims to exempt monetary donations and rewards in favor of national athletes and coaches from taxes. The Senate is also studying a resolution that would seek tax exemptions for Diaz.

On Monday, Diaz bagged the country’s first gold medal after conquering the women’s weightlifting 55 kg event.

She finished with a total score 224 kg, lifting 97 in the snatch and 127 in the clean & jerk to outduel China's Liao Qiuyun for the gold.

Her historic win ended a near century-long Olympic gold medal drought since the Philippines first competed in the games in 1924.

Diaz also became the most decorated Filipino Olympian in history with two recognitions under her name after previously winning a silver medal in the 2016 Rio Olympics.

Following her victory, the Filipino athlete was pledged with a haul of cash and non-cash incentives:

• P10 million cash reward mandated under the RA 10699
• P3 million from the Office of the President
• P10 million each from business tycoons Ramon Ang and Manuel Pangilinan
• P3 million from House Deputy Speaker Representative Mikee Romero
• P2.5 million from the city government of Zamboanga City, Diaz’s hometown
• P5 million plus free fuel for life from Dennis Uy’s Phoenix Petroleum
• a house and lot worth P4 million from PHirst Park Homes
• a condominium unit worth P14 million from Megaworld Corporation

On top of the said rewards, Diaz will also receive free flights for life from AirAsia Philippines, 80,000 miles per year for life from Philippine Airlines, a house and lot from the Philippine Sports Commission, a car from Ayala Foundation and Kia Philippines, among other incentives.

On Wednesday, President Rodrigo Duterte also said that the Office of the President will give Diaz P3 million and a fully furnished house and lot.

Nonetheless, the BIR congratulated Diaz and the Philippine team.

“[W]e hope for the best for the Filipino athletes still in the running to earn their spot at the Olympic podium,” it said. — BM, GMA News