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PCSO wants freedom from taxes, giving money to other agencies.

THE Philippine Charity Sweepstakes Office (PCSO) is seeking exemption from paying taxes and the removal of its mandatory contributions to various agencies and government programs to increase its medical assistance for the poor.

In a recent budget briefing, PCSO Vice Chairman and General Manager Royina M. Garma said exempting the PCSO from taxes will also lower the cost of their products, such as lotto tickets and increase the winnings in their lottery games.

Garma also said PCSO's mandatory contributions to various agencies and programs stretch the budget of the PCSO for charity activities.

'I think [from the] practical side, yes [remove mandatory contributions] so that we'll be able to provide more to those who need medical assistance, especially with the implementation of the universal health care so that we can give more to those in need,' Garma said.

'I think, Sir, it would [also] be best if we will be exempted from taxation, your honor,' she told the House Committee on Appropriations members during the same briefing.

Garma said exempting the PCSO from taxes will automatically make their products at least P4 cheaper. She said the 20 percent Documentary Stamp Tax (DST) charged for lottery tickets increase the cost to P24 instead of only P20.

This will also lead to more winnings for lotto players. Garma said sometimes the winners of small amounts still end up losing given the DST.

She added that the taxes was also one of the reasons why the PCSOs revenues declined this year.

In the January-to-June period this year, PCSO's revenues declined to P24.6 billion. This represented a 61.4 percent decline from the P63.6 billion posted in the same period last year.

Total taxes paid by PCSO to the government in the January-to- June 2019 period reached P6.95 billion. This includes final income taxes withheld, creditable income taxes, value-added tax, documentary stamp tax, taxes withheld on compensation; fringe benefit tax; and corporate income tax.

The largest tax is for the DST, which reached P4.91 billion in the first semester of the year. In the January-to-December period last year, the PCSO paid a total of P12.718 billion in documentary stamp taxes.

In terms of mandatory contributions, Garma said, this will free up around 40 percent of their charity funds. These mandatory contributions pertain to PCSO obligations that are mandated by law.

'We have to stretch the charity fund to be able to comply with all the agencies [that] we are mandated to provide funds [for] because there is a law mandating us to provide the assistance,' she said.

Based on a recent presentation at the House of Representatives, the PCSO released P13.916 billion for 24 mandatory contributions covered by various laws and executive orders. This covered the years 1998 to June 30, 2019.

The largest mandatory contribution was mandated by Executive Order Numbers 357 and 357-A, which grants 30 percent of the PCSO's lotto charity fund to local government units where lotto tickets are sold. As of June 2019, the PCSO has contributed a total of P6.437 billion to LGUs.

This was followed by provisions needed for Republic Act 7722 or the Higher Education Act of 1994. The PCSO extended a total of P3.426 billion to the Commission on Higher Education as of June 2019.

The third largest mandatory contribution was to meet Executive Order 447 for the 'Greater Medicine Access' program worth P1.34 billion; low-priced medicine program of the Philippine International Trading Corp., P47.812 million; and the Avian Flu Fund, P20 million.

'If the mandatory requirement will be removed, since there will be budget allocations in these agencies, I think we could give more to those people in need,' Garma said.

She explained that 30 percent of PCSOs' Net Charity Fund goes to charity programs and services. These are the Individual Medical Assistance Programs (Imap), which includes Malasakit Centers; the procurement of medical equipment; military and police health facilities; calamity assistance; and ambulance donations.

In the first semester of 2019, the PCSO extended to Imaps P2.817 billion; medical equipment, P27.827 million; military and police health facilities, P85.95 million; calamity assistance, P42.14 million; and ambulance donation, P726.47 million.
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Publication:Business Mirror (Makati City, Philippines)
Date:Aug 26, 2019
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