The Bureau of Internal Revenue (BIR) said on Thursday donations to flood victims are exempted from paying donor's tax only if they are coursed to qualified government and private charitable institutions.

The BIR issued the clarification as hundreds of thousands of hapless victims of cyclones “Ondoy” and “Pepeng” have asked the BIR to waive the collection of the tax to facilitate the distribution of relief goods and cash to the needy.

Under the Tax Code, donors are slapped with the donor's tax if they claim such donations as part of their expenses in their income tax returns (ITR).

Revenue Regional Directors Antonio Montemayor of Quezon City and Jaime Santiago of Valenzuela explained that corporations and individuals need not pay the tax and can claim the whole amount as deductions in their ITR.

They stressed, however, that such donations must pass through the Social Welfare Administration or to any accredited foundations such as those of ABS-CBN and GMA 7 broadcast networks.

The donor's tax rate is equivalent to 30 percent of the amount donated if the recipient is a stranger to the donor and a lower rate of two to 15 percent if he is a relative of the donor.

The BIR came out with the donor-donee scheme to avoid tax evasion wherein some enterprises put up foundations to channel part of their earnings to avoid payment of correct income taxes.