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PCSO seeks lower stamp tax rate to hike contributions to UHC
HIGHER CONTRIBUTION TO UHC. The Philippine Charity Sweepstakes Office (PCSO) is lobbying Congress to reduce the documentary stamp tax rate imposed on its gross retail receipts to be able to raise its contributions to the Universal Health Care (UHC) law. PCSO chair Junie E. Cua said during a Senate hearing on Wednesday (Feb. 1, 2023) that reducing the DST rate to just 10 percent from the present 20 percent would hike PCSO’s contributions by 170 percent, from a projected PHP1.25 billion to almost PHP3.4 billion, this year. (Photo courtesy of Chairman Junie Cua / FB)
MANILA – The Philippine Charity Sweepstakes Office (PCSO) will be able to help more indigent Filipinos through higher contributions to the Universal Health Care (UHC) if the agency’s documentary stamps tax (DST) rate is reduced to 10 percent, its chairman has said.
Reducing the DST rate to 10 percent from the current 20 percent will enable the PCSO to raise its contributions to the UHC by 170 percent, or PHP2 billion, from a projected PHP1.25 billion to almost PHP3.4 billion this year, PCSO chair Junie E. Cua told a Senate hearing conducted by the Committee on Health and Demography led by Senator Joseph Victor Ejercito on Feb. 1.
“You will note that the ability of PCSO to contribute to the UHC program is the fact that we need to pay 20 percent of our receipts by way of documentary stamp tax and this runs into tens of billions. Our advocacy right now is, if we can be allowed by Congress, to reduce our DST obligation, tataas yung aming contribution sa UHC (our contribution to UHC will increase),” Cua told senators when asked how the PCSO could contribute further to the UHC.
He noted that the PCSO could contribute PHP3.3 billion and PHP4.4 billion if the DST rate is only 10 percent and 5 percent, respectively.
In response, Ejercito promised that the Senate would study the legislation on the proposed reduction of the DST rate, saying that more than “PHP2 billion will be added to the UHC from PCSO alone.”
In perspective, PHP2 billion can fund 769,230 hemodialysis sessions for indigent diabetic patients, considering that the Philippine Health Insurance Corp. (PhilHealth) coverage rate per session is PHP2,600.
The same amount can help 125,000 indigent patients with severe dengue, with PhilHealth covering PHP16,000 per case.
Cua said this is among the reasons why the PCSO is lobbying Congress to reduce the DST rate imposed on gross retail receipts.
The PCSO is also making representations before the House of Representatives for the amendment of its Charter to rationalize its revenue allocations to further reduce the burden on the Charity Fund.
“Both initiatives, if approved by Congress, would result to an increase in the agency’s contribution to UHC that would ultimately benefit the public in terms of realizing an improved benefit packages being offered by the government through PhilHealth,” Cua said.
The PCSO is one of the fund sources for the implementation of the UHC law, with 40 percent of its “net Charity Fund” to be allocated to PhilHealth for the UHC this year.
In its presentation to the Senate, the PCSO projected PHP53.23 billion in total retail receipts for 2023.
With this, it has to pay about PHP10.65 billion (20 percent of retail receipts) in DST.
Meanwhile, the charity fund allocation is 30 percent of the total receipts, or PHP15.65 billion, which is used to pay the DST, mandatory contributions, and other expenses of the PCSO.
Thus, the projected net charity fund is only about PHP3.13 billion, 40 percent of which, or PHP1.25 billion, will be allocated to the UHC.
According to the PCSO, if the DST is reduced to 10 percent, the projected net charity fund is projected to increase to PHP8,455,788,962.61.
At this rate, the resulting UHC share will then rise to PHP3,382,315,585.05, marking an increase of 169.9 percent, as Cua said.
Reducing the DST rate further to 5 percent will increase the net charity fund to PHP11.1 billion, resulting in a PHP4.45 billion allocation to the UHC, or a 254.86 percent increase from the original computation at 20 percent DST.
From October 2019 to December 2022, the PCSO released PHP2.7 billion as its contribution to the UHC Act.
The PCSO is the principal government agency for raising and providing funds for health programs, medical assistance and services, and charities of national character through the conduct of sweepstakes horse races, lotteries, and similar activities. (PNA)
Reducing the DST rate to 10 percent from the current 20 percent will enable the PCSO to raise its contributions to the UHC by 170 percent, or PHP2 billion, from a projected PHP1.25 billion to almost PHP3.4 billion this year, PCSO chair Junie E. Cua told a Senate hearing conducted by the Committee on Health and Demography led by Senator Joseph Victor Ejercito on Feb. 1.
“You will note that the ability of PCSO to contribute to the UHC program is the fact that we need to pay 20 percent of our receipts by way of documentary stamp tax and this runs into tens of billions. Our advocacy right now is, if we can be allowed by Congress, to reduce our DST obligation, tataas yung aming contribution sa UHC (our contribution to UHC will increase),” Cua told senators when asked how the PCSO could contribute further to the UHC.
He noted that the PCSO could contribute PHP3.3 billion and PHP4.4 billion if the DST rate is only 10 percent and 5 percent, respectively.
In response, Ejercito promised that the Senate would study the legislation on the proposed reduction of the DST rate, saying that more than “PHP2 billion will be added to the UHC from PCSO alone.”
In perspective, PHP2 billion can fund 769,230 hemodialysis sessions for indigent diabetic patients, considering that the Philippine Health Insurance Corp. (PhilHealth) coverage rate per session is PHP2,600.
The same amount can help 125,000 indigent patients with severe dengue, with PhilHealth covering PHP16,000 per case.
Cua said this is among the reasons why the PCSO is lobbying Congress to reduce the DST rate imposed on gross retail receipts.
The PCSO is also making representations before the House of Representatives for the amendment of its Charter to rationalize its revenue allocations to further reduce the burden on the Charity Fund.
“Both initiatives, if approved by Congress, would result to an increase in the agency’s contribution to UHC that would ultimately benefit the public in terms of realizing an improved benefit packages being offered by the government through PhilHealth,” Cua said.
The PCSO is one of the fund sources for the implementation of the UHC law, with 40 percent of its “net Charity Fund” to be allocated to PhilHealth for the UHC this year.
In its presentation to the Senate, the PCSO projected PHP53.23 billion in total retail receipts for 2023.
With this, it has to pay about PHP10.65 billion (20 percent of retail receipts) in DST.
Meanwhile, the charity fund allocation is 30 percent of the total receipts, or PHP15.65 billion, which is used to pay the DST, mandatory contributions, and other expenses of the PCSO.
Thus, the projected net charity fund is only about PHP3.13 billion, 40 percent of which, or PHP1.25 billion, will be allocated to the UHC.
According to the PCSO, if the DST is reduced to 10 percent, the projected net charity fund is projected to increase to PHP8,455,788,962.61.
At this rate, the resulting UHC share will then rise to PHP3,382,315,585.05, marking an increase of 169.9 percent, as Cua said.
Reducing the DST rate further to 5 percent will increase the net charity fund to PHP11.1 billion, resulting in a PHP4.45 billion allocation to the UHC, or a 254.86 percent increase from the original computation at 20 percent DST.
From October 2019 to December 2022, the PCSO released PHP2.7 billion as its contribution to the UHC Act.
The PCSO is the principal government agency for raising and providing funds for health programs, medical assistance and services, and charities of national character through the conduct of sweepstakes horse races, lotteries, and similar activities. (PNA)
Feb 4, 2023
