PCSO must be free of taxes, mandatory contributions: solons

FILE: Ikinasa na ngayong sabado ni PMGen Guillermo Lorenzo T Eleazar, hepe ng National Capital Region Police Office ang direktiba ni Presidente Rodrigo R Duterte na hulihin ang nagpapatakbo at ipagbawal ang anumang gaming and gambling activities meron man o walang prangkisa sa Philippine Charity Sweepstakes Office (PCSO). (Photo: PIO NCRPO/Facebook)

MANILA — Several House members on Friday said the Philippine Charity Sweepstakes Office (PCSO) should be exempted from paying taxes and from making mandatory contributions to other government offices so that the agency would have more funds for charity programs.

During the House deliberations on the PCSO’s proposed 2020 budget, Albay 1st District Rep.

Edcel Lagman pointed out that the amount allocated by the agency for charity is much less than those for taxes and mandatory contributions.

PCSO vice president and general manager Royina Garma said in 2018, the PCSO paid PHP16.7 billion in taxes while PHP33.6 billion of its revenues went to prizes.

Only PHP9 billion was left to fund the various PCSO charity programs.

Lagman said the “C” in PCSO stands for charity, asking Garma if Congress should rationalize the agency’s obligations in relation to its charity function and mandate.

“In what manner should we rationalize it, should we decrease your tax obligation or exempt you from taxes?” he asked the PCSO official.

“It would be best if we would be exempted from taxation,” Garma said.

“I would agree with you because your charity is much lower than your tax obligations,” the Albay legislator said, adding that at least 30 percent of revenues should go to charity, which would essentially raise charity funding to more than PHP 18 billion.

Meanwhile, Negros Oriental 3rd District Rep. Arnie Teves said he will file a bill removing the mandatory contributions of the PCSO to other agencies.

The legislator said the money for mandatory contributions would be of better use if they are allocated to people who need medical assistance.

In her presentation, Garma said the agency remitted a total of PHP13.92 billion to various agencies and organizations from 1998 to June 30, 2019.

Among the contributions made by the PCSO to other agencies include the PHP1 billion Standby Fund for the financial requirement for Severe Acute Respiratory Syndrome (SARS) awareness and health promotion campaign (E.O. 201); PHP250 million standby fund for the financial requirements of the Avian Influenza or Bird Flu Viruses (E.O. 280); 5 percent lotto share of local government units from the charity fund (E.O. 357); PHP250 million from the annual net earnings from lotto for the Museum Endowment Fund (RA 8492); six Sweepstakes Draws as contribution to the Philippine Sports Commission Program (RA 6847); 1 percent of lotto gross sales to the Commission on Higher Education (RA 7722); and Documentary Stamp Tax – 10 percent of the gross sales (RA 7660); among others.

“Sa tingin ko, dapat tanggalin na ‘yung mandatory contributions, para ‘yung buong PHP13 billion na ‘yun binigay sa may sakit (In my view, mandatory contributions must be removed, so that the whole PHP13 billion would have been given to the sick),” Teves said.

When asked if she agreed with the proposal, Garma said it is “practical” since the agency will be able to “provide more for those who need medical assistance.”

“I will file a bill,” Teves said.

Surigao del Sur 1st District Rep. Prospero Pichay Jr. agreed with Lagman and Teves, saying the PCSO should be both tax-exempt and have fiscal autonomy.

“The mandated contributions should be scrapped. As a government corporation, your expenditures should be determined by your own Board. You should have fiscal autonomy,” he said.

“If Congress continues to pass laws that will mandate PCSO to contribute to other agencies, baka wala ng matitira para sa charity (there will be no more left for charity),” Pichay said.

The legislator said the PCSO Board should thoroughly study the mandatory contribution being made to other agencies since other agencies, even without the PCSO contributions, are being subsidized by the national government.

He likewise noted that in legislating mandatory contributions, Congress is essentially encroaching on the powers of the PCSO Board of Directors.

The Surigao del Sur lawmaker also agreed that the PCSO’s main purpose is to give charity — “to collect revenue to give to charity.”

“I agree with the esteemed Cong. Lagman. Why are you paying taxes? Since you are a charity organization, you should not be paying taxes,” Pichay said.

The PCSO serves as the principal government agency for raising and providing funds for health programs, medical assistance and services, and charities of national character.

The Individual Medical Assistance Program (IMAP) is considered the flagship program of the PCSO which was institutionalized in 1995 to provide timely and responsive financial assistance to individuals with health-related problems.

Aside from the IMAP, the PCSO’s other charity programs include the Endowment Fund Program, Institutional Partnership Program, Procurement of Medical Equipment, AFP/PNP Health Facilities Capability Building Project, Calamity Assistance Program, Milk Feeding Program, Integrated Health for Overall Productivity and Empowerment (I-HOPE), and Out-Patient Services Program (Medical and Dental Services), among others.