Looting losses tax deductible, says BIR chief

Bureau of Internal Revenue Commissioner Kim Henares

MANILA, Philippines—Businesses which sustained losses from looting in the aftermath of Supertyphoon “Yolanda” can claim tax deductions on their income tax returns with the Bureau of Internal Revenue (BIR), Commissioner Kim Henares said on Thursday.

“If you have losses due to theft, it’s the same as having losses because of the storm,” Henares said, noting that business losses from looting or theft are considered to be “casualty loss” in the Tax Code.

Henares was asked by reporters if businesses affected by heavy looting in typhoon-devastated areas like Tacloban City would be given tax breaks.

Malacañang has deployed more policemen in Tacloban City and imposed a curfew to stop the heavy looting and restore peace and order.

Since the storm struck last Friday, people have broken into homes, garages, malls and only recently a rice warehouse in Tacloban City to get food, water and other necessities.

Prove your losses

Speaking to reporters, Henares made it clear that the tax deductions will be given to these businesses that can prove their losses were due to theft. They will also get the tax deductions if they were not paid by their insurance company for these losses, she said.

But they have to prove their losses were due to theft by filing a police report, for instance, she said.

Henares said there were documentary requirements to prove such losses as she noted that this was because “some people take advantage of the situation.”

“Even if their losses were not a result of theft, they say it as so for the deductions. So they really have to prove there was theft,” she said.

Foreign donations

Meanwhile, Henares said that foreign donations to typhoon survivors through the National Disaster Risk Reduction and Management Council are duty-exempt.

She said that as long as the donation is made to NDRRMC, the government will pay for the 12-percent value-added tax via a tax expenditure.

“So at the end of the day, there’s really no tax because this is going to be shouldered by government via budget reports for as long as the donation s made to the NDRRMC,” she said.

For local donations, she said these are donor-tax-free provided that these donations are given to accredited relief organizations.

Henares said the government keeps track of foreign donations to typhoon survivors so that the government could be able to help thank them and show that they were given to the intended beneficiaries.

This was also being done so that the government can help “those who are helping and not to people who are lawless like smugglers,” she said.

“Because we know that there are people who will take advantage of it,” she said.