Ditch donation tax!

April 20, 2020

It simply does not make fiscal and moral sense at all.

And so we are inclined to fully agree with and strongly support a lady lawmaker in calling for the scrapping the donor's tax and making the value of donations deductible from income tax to  boost the country's efforts to save frontliners and more lives during calamities.

"Taxes are not the only way to generate much needed government resources. A new world is emould erging from this Covid-19 crisis and new ways of looking at things are the key to survival," Sen. Imee Marcos explained.

Marcos, who chairs the Senate committee on economic affairs, said donations from "good Samaritans," be they individuals or companies, actually fill the gaps in supply chains of food, medical supplies, and other crucial resources needed by the government to aid calamity-stricken communities.

Among the seven bills she filed amid the lockdown, Senate Bill 1429 seeks to cut out the red tape of applying with the Department of Finance for certificates of tax exemption on donations, by institutionalizing full tax benefits for donors.

"This bill means to encourage the bayanihan spirit inherent in us Filipinos and not burden our generosity with taxes," Marcos said.

The legal benefits proposed in the Marcos bill apply to donations made during a government-declared state of calamity and are retroactive to January 2020 when the Covid-19 crisis was beginning to spread worldwide.

"Our country has faced a cluster of calamities in the early months just this year, like the Taal volcano eruption, the Asian Swine Flu, earthquakes nationwide. These calamities may recur all at the same time, so the spirit of giving must be encouraged," she  added.

Meanwhile, not only does the move help keep people in their homes during the quarantine, but providing the wage subsidy for workers in the micro, small and medium enterprises sector would  also allow the restart of the country's economy faster and smoother.

Sen. Joel Villanueva was expressing gratitude to the government for considering the proposal he made to provide a wage subsidy to MSME workers on the condition that business owners retain their employment.

"We express our gratitude to our government for considering our proposal to provide a wage subsidy for workers in the micro, small and medium enterprises sector," said Villanueva, chair of the Senate labor committee.

"The subsidy will help our workers in the sector to provide for their families while the quarantine is ongoing."

"Securing the commitment of MSME employers to retain the employment of their workers to be eligible for the subsidy also eases the concern of our people on their job status once the quarantine is lifted. With this condition, we believe this will help smoothen our transition to restarting our economy, and arrest the decline in employment in the country," he continued.

The government said it would provide a wage subsidy to 3.4 million MSME workers, on the condition that business owners would not layoff its people while the quarantine is being enforced. MSMEs registered with the Bureau of Internal Revenue and the Social Security System would be prioritized.

Data from the Department of Trade and Industry and the Philippine Statistics Authority showed that in 2018, MSMEs employed 5.7 million workers nationwide, representing about 13 percent of the total number of employed workers.

Industries severely affected by the community quarantine enforced in Luzon and other local governments are in the wholesale and retail trade, and food and accommodation sectors which comprise at least 50 percent of the employment generated by MSMEs, according to the PSA.

Villanueva asked MSMEs to "to file applications as soon as our government completes the implementing guidelines on the wage subsidy program, which will include the list of requirements that need to be submitted".

"Complete requirements allow our agencies to process the application within their respective timelines, which helps expedite the release of the wage subsidy for our workers," he said.

The lawmaker reiterated his appeal for the government to provide credit assistance to MSMEs as well, even before the community quarantine is lifted, to help maintain and boost their operations.

Should the government decide to give credit guarantees to MSMEs, banks would likely grant these businesses loans that are needed to finance their recovery, Villanueva explained.