Calamity-related tax relief pushed

A BILL seeking to let local governments grant tax relief to communities hit by calamities was filed in the House of Representatives last month.

House Bill No. 6256 seeks to grant a two‑year real property tax break in areas placed under a state of calamity by local governments, while exempting donations to disaster‑struck regions from donor’s taxes.

The Philippines is among the world’s most disaster-prone countries, with storms and monsoon rains routinely inundating towns and cities.

The Southeast Asian nation has so far been hit by 22 storms this year, with a series of strong typhoons in late October leaving hundreds dead and causing billions of pesos in damage.

“Given our country’s vulnerability to natural disasters, the government needs to strengthen its disaster prevention and response program, and at the same time enact fiscal measures that will provide tax exemptions in times of calamity,” Nueva Ecija Rep. Mikaela Angela B. Suansing said in the bill’s explanatory note.

She said the current tax system hampers the “expeditious flow” of donations, affecting aid rollout. “Under the law, entities and individuals who intend to donate huge sums of aid must pay a substantial donor’s tax.”

Donations exceeding P250,000 are subject to a 6% donor’s tax, according to the 2018 Tax Reform for Acceleration and Inclusion Act.

“Such may only be exempted from taxes and import duties if these are channeled through certain government offices,” Ms. Suansing said, referring to the Social Welfare department and the National Disaster Risk Reduction and Management Council. “This issue is further compounded by the fact that not all organizations involved in relief operations are accredited by the State.” — Kenneth Christiane L. Basilio