No chess scam, says PCF

The Philippine Chess Federation yesterday said miscommunication with the Bureau of Internal Revenue resulted in a deduction of 10 percent, instead of the required 20 percent, on the winnings of players in the just-concluded Chess Pambansa Millennium Grand Prix, adding that it had never announced it was waiving the required final tax.

PCF chairman Arturo A. Borjal said he received an advice from Internal Revenue Commissioner Dakila Fonacier that 20 percent should be withheld from the winners' earnings.

"If we don't get the additional 10 percent from the players, many of whom we have already paid, we will be compelled by the BIR to pay the deficit ourselves," said Borjal.

Borjal's statement came in the wake of reports that the PCF "had pocketed" the P100,000 representing 10 percent of the P1-M purse of the champion, Grandmaster Rogelio Antonio.

Borjal said the PCF never announced that the 20 percent tax will be waived, adding that the tax withheld will be remitted to the BIR by the PCF in its capacity as withholding agent.

The PCF said it implemented deductions on winnings of foreign players in previous Far East Bank Philippine Open tournaments.

However, in the case of local players, the sponsoring firm -- Far East Bank and Trust Company -- eased the tax burden on the players by paying the tax itself.

The total cash prizes due to the participants in the millennium chess grand prix amounted to P2.3 million. The 64 losers in the round of 128 received P3,000 each, 32 losers in the round of 64 P6,000 each, and 16 losers in the round of 32 P9,000 each.

The eight losers in the round-of-16 got P18,000, and the four losing quarterfinalists P36,000 each.

The two losing semifinalists received P72,000 and the loser in the finals P144,000. The champion gets P1-M.

The PCF said it expected to receive P1.39 million as entry fees from the 139 registered players (P10,000 per player), with P1-M to come from the main sponsor, Real Bank.

The practice of withholding tax dues holds for all corporations. Organizers of such events as the Philippine Open golf tournament and legs of the Philippine Golf Circuit withhold the taxes on prizes before these are awarded to the players.

"We are only doing what we have to do under Philippine laws, in this case the National Internal Revenue Code," said Borjal.