THE Department of Justice has defended double accreditation requirements being imposed on social welfare and development agencies (SWDA) to be recognized as “donee institutions” by the Bureau of Internal Revenue.
Justice Secretary Jesus Crispin Remulla said the department recognizes the role of the Department of Social Welfare and Development (DSWD) and the Philippine Council for NGO Certification (PCNC) in regulating SWDAs in the country.
To recall, Social Welfare Secretary Rex Gatchalian asked the DOJ for its legal opinion regarding the accreditation of social welfare institutions, whether it falls exclusively under the DSWD’s roles and functions, excluding other public and private entities.
Gatchalian made the request after he said his office received complaints from several SWDAs about the double accreditation requirement to be recognized by the BIR as donee institutions, specifically, the initial accreditation from the DSWD and the subsequent one from the PCNC.
Gatchalian said BIR recognition is important for SWDAs to be able to claim deduction from gross income and exemption from the donor’s tax.
But SWDAs complained to the DSWD of the fees that they have to pay to PCNC, including an annual membership ranging from P2,000 to P10,000.
In its letter, the DSWD argued that its position as the sole entity in connection with the accreditation of SWDAs is anchored on the 1987 Administrative Code and Executive Order No. 221 Series of 2003.
It added that EO No. 720, Series of 2008, which designates PCNC as an accrediting body for purposes of deductions from gross income did not mention social welfare institutions in the list of qualifying entities for accreditation as donee institutions.
But the DOJ disagreed, saying the PCNC’s mandate is clearly outlined in the said EO.
“The foregoing considered, it is beyond question that the DSWD holds the authority to register, license and accredit individuals, agencies and organizations engaged in social welfare and development services,” Remulla said in his legal opinion issued on January 10.
”While PCNC also engages in accrediting these organizations, it serves the sole purpose of acknowledging them as donee institutions for tax-related matters, specifically enabling the deductibility of contributions or gifts made to them as accredited donee institutions in computing taxable income,” he added.
