City hall donor can deduct gift from his gross income – BIR

By Mortz C. Ortigoza

DAGUPAN CITY – The donor of the more than hundred million pesos of land to host the new city hall here can deduct his donation to his taxable gross income to the government, according to a high official of the Bureau of Internal Revenue.

CPA-Lawyer Maria Isabel B. Utit, the chief of the BIR in Eastern Pangasinan, cited the National Internal Revenue Code (NIRC) that provides that contribution to the government political subdivision is deductible in full.

“Contributions or gifts actually paid or made within the taxable year to, or for the use of the government of the Philippines or any of its agencies or any political subdivision thereof exclusively for public purposes,” she cited some parts of  Paragraph H Section 34 of the NIRC that talks about allowable deduction from gross income of donor like Kerwin Fernandez.

This law, according to Utit, was hammered by Congress to encourage citizens to donate to the government.

She said that the land where the ritzy BIR’s Revenue District Office-6 was donated by Philanthropist Ernesto Go of Urdaneta City.

Many government lands in this burgeoning city where government properties are perched were donated by well intention citizens.

According to Councilor Jeslito Seen benevolent families like the De Venecias, Fernandezes, Reynas, Decanos, Oviedos, Llamases, Calimlims, Samsons, and other families donated the plaza, market, roads, highways, schools, and the old city hall .

“Iyan ang pinag umpisahan ng Dagupan kung bakit siya umunlad. Kung saan wala, nagkaroon ng simbahahan, kung saan wala, nagkaroon ng ospital. Kung saan wala, nagkaroon tayo ng plaza, kung saan wala, nagkaroon tayo ng munisipyo,” the lawmaker stressed.

Assistant Revenue District Office-4 Chief Trina Villamil cited that Kerwin Fernandez, the donor of the multi-million pesos more or less 1.2 hectares of land in Pantal-Lucao Road, will not be paying the donor tax as mandated by the National Internal Revenue Code (NIRC).

Villamil explained that Paragraph 2 Section 101 of the NIRC cited the exemptions of certain gifts.

 “Gifts made to or for the use of the National Government or any entity created by any of its agencies which is not conducted for profit, or to any political subdivision of the said Government,” the Code says.

The BIR usually taxes by 30 percent the value of the donation or gift given by the donor to donee if the duo is not relatives up to the fourth degree of consanguinity or first cousin.