Tax benefits of COVID-19 donations
Acts of generosity in a time of crisis can be financially beneficial to the kindhearted.This is the subliminal message of Revenue Regulations No. 9-2020 of the Bureau of Internal Revenue (BIR) granting full deductibility from gross income and exemption from donor’s tax the donations related to the new coronavirus disease (COVID-19) crisis.
The circular applies to cash donations and donations of critical health care equipment, relief goods and use of property made to the national government, private hospitals, nonprofit social or charitable institutions and local private corporations or civic organizations.Private corporations or civic organizations shall be entitled to the tax privileges if they directly and exclusively distribute or transfer the donations to, or partner as conduit with accredited nongovernmental organizations or agencies created by the national government for that purpose.
The availment of the tax breaks is subject to, among others, the following conditions: (a) the donation is for the sole and exclusive purpose of fighting COVID-19 and (b) they shall be effective only during the three-month period stated in the law, beginning March 16, unless otherwise extended by Congress or ended by presidential proclamation.
The full deductibility from gross income of COVID-19-related donations is welcome news to generous donors, in particular, corporate donors.
Every allowable deduction from gross income translates to additional profits and possible cash dividends to the stockholders. But in the same token, every centavo donated represents money diverted from the corporation’s funds.
It is reasonable to assume, however, that when those donors opened their coffers to give cash or procure health care equipment and other facilities to the people who were on the front line of the battle against COVID-19, e.g., medical personnel and law enforcers, or distributed relief goods to displaced workers, they did so out of genuine concern and compassion for their beneficiaries.
Note these are the same business groups that, in the past, extended assistance to victims of natural or man-made calamities in our country.
With or without expectation of tax breaks, it’s most likely they would have engaged in acts of corporate social responsibility in this hour of need.
Although guided by altruistic reasons when they made the donations, the donors cannot be faulted if they avail of the benefits of full deduction of the value of their donations from their gross income.
Since the Bayanihan Act was passed by Congress in under 36 hours, there is reason to believe the corporate donors did not lobby for the inclusion of a provision on donations that would redound to their benefit.
But if only to maintain the integrity of their donations, it would be nice if the corporate donors declare their intention to forgo of the available tax break so as not to reduce their tax payments, particularly at this time when the government is strapped for funds.
That gesture would undoubtedly earn them the public’s esteem and increase their stature in the country a hundredfold. No advertisement or public relations stunt would be needed to make that happen.
As the government, through the BIR, expresses its gratitude to individual and corporate donors for their contributions to the fight against the pandemic through tax breaks, let us not lose sight of countless Filipinos who have contributed (and continue to contribute) their share in easing the adverse effects of this global problem.
These are the people who without fanfare prepared food and refreshments for police personnel enforcing the lockdown, sewed face masks using their own resources and distributed them for free to those who needed them, and provided free lodgings and transportation to medical front-liners, to name a few.
Although they will not get any financial payback for their efforts, they have the eternal gratitude of the people they served or helped as their reward. And nothing can be more precious and endearing than that. INQ
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For more news about the novel coronavirus click here.
What you need to know about Coronavirus.
For more information on COVID-19, call the DOH Hotline: (02) 86517800 local 1149/1150.
The Inquirer Foundation supports our healthcare frontliners and is still accepting cash donations to be deposited at Banco de Oro (BDO) current account #007960018860 or donate through PayMaya using this link.
