Paez and Bravo of COOP-NATCCO said their proposal will help legitimate NGOs and charitable organizations raise funds for their humanitarian endeavors.

COOP-NATCCO is a partylist ally of the National Unity Party (NUP) under the Coalition for Peace and Development (CPD).

“[The bill seeks] to clear the doubt of bogus CSOs (civil society organizations) and to make them accountable to the public,” Paez and Bravo said in the bill’s explanatory note.

According to Paez, House Bill 5113 gives  taxpayers the option of selecting a beneficiary that will receive the 5% share of their income tax.

If a taxpayer decides not to allocate 5 % of his or her income tax to charity, the whole amount will go to the National Treasury, Bravo said.

The bill mandates the Bureau of Internal Revenue (BIR) to establish a mechanism that will realize this goal. An interagency committee led by the Department of Budget and Management (DBM) will provide the list of charitable institutions and NGOs qualified as beneficiaries.

Under HB 5113, qualified organizations are those that are duly registered with the Securities and Exchange Commission (SEC), the Cooperative Development Authority (CDA), Department of Labor and Employment (DOLE), Housing and Land Use Regulatory Board (HLURB) or other formal accrediting bodies approved by law.

Taxpayers who are founders, officers, members or employees of a particular NGO or are related to any of these parties up to the fourth degree of consanguinity or affinity are barred from allocating funds to that institution, HB 5113 states.

Funds received by the beneficiary organizations will be exempt from donor’s tax or any other taxes.