Will taxmen come for Hidilyn Diaz's prizes?
MANILA, Philippines (Update 1, July 29 3:27 p.m.) — Are the prizes of Olympic gold medalist Hidilyn Diaz taxable? The short answer is yes.
Under the law, Diaz is set to receive P10 million from the government for winning the weightlifting women’s 55kg category in the Tokyo Olympics Monday night, a historic feat that gave the Philippines its first ever Olympic gold medal.
Apart from the mandated cash-prize from the state, businessmen are also pouring hefty rewards on Diaz. Tycoons Manny V. Pangilinan of PLDT Inc. and Ramon S. Ang of San Miguel Corp. both promised to give the weightlifting wonder an additional P10 million each. Deputy speaker Mikey Romero is also rewarding Diaz with cash prize amounting to P3 million.
As of reporting, Diaz is set to rake in a total of P40.5 million in cash rewards after her hometown Zamboanga City recently chipped in P2.5 million while Davao-based businessman Dennis Uy pledged P5 million. These rewards are on top of other incentives extended by several companies, which include a P14-million condo unit from Megaworld Corp. and a P4-million house and lot from Century Properties Group, among others.
Diaz’s prizes are taxable
In a statement on Thursday, the Bureau of Internal Revenue said Diaz won't have to pay income tax for the P10-million cash prize she will receive from the government, thanks to a tax exemption provided by the Tax Code on prizes and awards in sports competition.
But the BIR said businessmen's gifts to Diaz will be subject to the 6% donor's tax, which will be paid by the donors. This means Diaz will receive the incentives promised to her by the private sector in full.
Republic Act 10963, also known as TRAIN law, lowered the donor’s tax rate to 6% in excess of P250,000. Without that law, the maximum donor's tax would be P1,004,000, plus 15% in excess of P10 million.
“Note that tax exemptions are strictly construed so for an incentive to be considered tax exempt, there must be a clear provision of law supporting its exemption,” Eleanor Roque, tax advisory head at P&A Grant Thornton, an auditing firm, said.
Editor's note: This story was updated to include the statement of the Bureau of Internal Revenue on Hidilyn Diaz's prizes.
- Latest
- Trending
