A squabble over taxes has opened a rift between the Philippines' top chessplayers and the Philippine Chess Federation (PCF). GMs Joey Antonio and Eugene Torre held a press conference this week to call for the ousting of PCF Secretary General Edgardo de Castro.
The simmering emotions overboiled when the PCF announced the prize fund of the recent Pambansa Millennium Grand Prix tournament (the richest in Philippines history) would have to be taxed 10%, and possibly 20%.
The winner of the tournament, Antonio, was to receive 1 million Philippine pesos [approximately US $24,000], but was asked to sign a voucher for P900,000 instead, and was told the other 100,000 was withheld for taxes. Antonio refused and left without signing anything, the Manila Times reported.
Each side presented its own quotations from the Internal Revenue Code supporting its position. Antonio read from chapter 32 which exempts "all prizes and awards granted to athletes in local and international sports competitions and tournaments whether held in the Philippines or abroad and
sanctioned by their national sports associations."
The PCF countered with section 24, which states that winnings derived from sources within the Philippines are subject to a 20% withholding final tax. After Antonio's intransigence, the organization then sought clarification and a final ruling from the Internal Revenue, a turnaround from their previous statements that taxes would have to be withheld unconditionally.
At their press conference, Antonio and Torre said reforms are needed because the PCF isn't acting in the best interests of chessplayers.
They said the PCF hasn't held elections since 1987, a violation of federation rules which mandate elections every two years.
Athletics president and chess patron Go Teng Kok, quoted in the Manila Bulletin, said top PCF officials,
"particularly Secretary General Edgar de Castro, will have
to go to save the sport....Perhaps those ignorant PCF bozos have seen
the light, thus the turnaround."
There is some dispute about the extent of a player "revolt" against the PCF. Antonio, IM Bong Villamayor, IM Nelson Mariano II and NM Richard Bitoon all denied any involvement in an attempt to replace the PCF as the Philippines' governing body. Antonio's wife Aileen was reported as saying a "renegade group" was the figment of someone's imagination.
Whether there is a movement to replace the PCF or not, there is no denying the top players are extremely dissatisfied with the political leadership of the PCF, which they believe has not benefited them.
Antonio faulted the PCF for being unaware of the provision exempting athletes from the tax: "It was very clear, so why would they tax me? They are trying to make it appear that they worked for the exemption in an apparent attempt to avoid being criticized for its ignorance of existing tax regulations. Truth is, it was Attorney Estimo, Mr. Campomanes and myself who followed up this matter with the BIR [Bureau of Internal Revenue] on Thursday and Friday."
But Philippine chessplayers were reportedly "stunned" when the BIR apparently ruled Tuesday that Antonio's prize would indeed have to be taxed the full 20% [P200,000]. The exemption was denied because the PCF is not a member of the Philippine Olympic Committee (POC).
"This is a sad day for chess," Torre was quoted in the Manila Bulletin. "This time, the PCF has to shoulder the blame for its ineptness in not being a POC member despite the fact that FIDE is now recognized by the International Olympic Committee as an international sports federation....Again, it's our chess players who have to suffer."
For his part, Edgar de Castro said the PCF had filed an application for membership with the POC in 1990, but it has never been acted upon because chess is not an Olympic event, it was reported in the Philippine Star.
The BIR apparently is still studying the laws governing prize money and may have more to say later. The final decision may be yet to come. According to the Philippine Star, the BIR is denying it has reached an official decision. De Castro himself is vowing to do everything he can to award Antonio the full amount of his prize winnings.
Antonio and Torre left for Bali, Indonesia, to play in an open tournament there. When they return, will they have enough power, support, and resolve to force changes on the PCF? Can they find a way to oust Edgar de Castro and other politicians? Do the players really want to replace the PCF with a new organisation (perhaps the recently-formed Philippine Chess Society)?
Former FIDE Czar Florencio Campomanes believes Antonio's prize money should not have to be taxed; and he cited a chapter from a 1957 tax reform act to back up his opinion, the Philippine Daily Inquirer reported. He
apparently doesn't want to see the PCF thrown away, either. As he wrote in his Manila Times weekly column, "After all is said and done, all the Philippine chess is today would scarcely have been possible without the PCF that was founded in 1956. I was there."
But Campomanes has jousted with PCF officials before, most notably when PCF Chairman Art Borjal publicly embarrassed Campomanes with charges of graft several years ago, the Philippine Daily Inquirer reported. Campo dropped a libel suit when Borjal apologized. Older, more established players are said to support Campo, while the younger generation has shown signs of backing the PCF.
Whatever happens, the anger and dissatisfaction some of the Philippines' best players feel toward their governing organisation will not dissipate quickly, and the feud will likely continue.
- Stephen Leary
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