NOV.

7, 2011 DATE

NR # 2580B
REF. NO.

House panel approves tax deduction of donations to Filipino Academy of Arts, Letter and Philosophy
The House Committee on Ways and Means has approved a tax provision in the proposed measure creating the Filipino Academy of Arts, Letters and Philosophy granting tax exemption to donations and grants to the institution made by a public or private person or organization. The approval was made in a recent hearing conducted by the Committee on Ways and Means presided by Rep. Reynaldo Umali (2nd District, Oriental Mindoro), a committee vice chairman, during which representatives of the Bureau of Internal Revenue and the Bureau of Local Government Finance endorsed House Bill 1746 or the proposed Filipino Academy of Arts, Letters and Philosophy Act. Umali said all tax exemption privileges should be specifically provided in the law, and these can never be just assumed. These have to be made explicit in the bill itself so that the donor can enjoy tax exemption privilege for all grants to the Academy made by a private or public person. According to lawyer Erwin Mendinueto of the Bureau of Internal Revenue Legal Division, it is already provided in the National Internal Revenue Code (NIRC) particularly Section 34 that donations to the Philippine government or any of its agencies, political subdivisions, including fully-owned corporations, exclusively to finance, provide for or be used as undertaking priority activities and education, is already deductible. He explained that only those engaged in trade or business or in the exercise of profession can deduct the donation from their income. A purely compensation income earning individual cannot deduct the donations made from his income, Mendinueto clarified. Consolacion Agcaoili, acting director of the Local Treasury Operations Division of the Bureau of Local Government Finance (BLGF) said what they are against is exempting the Academy from real property taxation. As much as possible, we discourage exemption from any form of real property taxation because that constitutes a basic and major income for LGUs, Agcaoili said. House Bill 1746 authored by Rep. Salvador Escudero lll (1st District, Sorsogon) was approved last March 1, 2011 by the House Committee on Basic Education, and was referred to the Committee on Ways and Means chaired by Rep. Hermilando Mandanas (2nd District, Batangas) for approval of its tax provision as provided in Section 9 of the bill.

NOV. 7, 2011 DATE

NR # 2580B
REF. NO.

The bill cites that the Constitution provides that the State shall foster the preservation, enrichment and dynamic evolution of a Filipino national culture based on the principle of unity and diversity in a climate of free artistic and intellectual expression. Likewise, Arts, Letters and Philosophy shall enjoy the patronage of the State, and the State shall conserve, promote and popularize the nations historical, cultural, literary and philosophical heritage and resources, as well as artistic creations. It provides for the creation of the Filipino Academy of Arts, Letters and Philosophy which shall be composed of outstanding Filipino artists, writers and philosophers and shall be organized and run by them. The Academy shall plan, formulate and implement programs for the conservation, development, enhancement and propagation of Filipino arts, letters and philosophies. Its powers include receive and allocate State subsidies for individual artists, writers and philosophers; solicit, receive and accept donations and grants from private and public persons and institutions, both Filipino and foreign, and conduct fund drives to support its programs and activities; set up prizes, awards and other incentives for artists, writers and philosophers; The Academy shall also recommend recipients of the Annual Republic Cultural Heritage Award, which shall be revived; and create these from donations and grants, administer a welfare fund for old, disabled, sick or indigent artists, writers and philosophers according to criteria which the Academy may prescribe. The management and control of the Academy shall be vested in a Governing Board composed of a Chairman and six members who shall initially be appointed by the President of the Philippines for a transition term of one year, and thereafter elected by the members of the Academy themselves for a regular term of three years. (30) rbb