BIR reminds candidates of tax on political contributions, campaign expenditures
by Andrew Doga-ong
Bontoc, Mt. Province (20 February) -- Candidates in the May 2010 elections are reminded of their civic duty to collect the five percent withholding tax on all their payments on political contributions and campaign expenditures.
Bureau of Internal Revenue Regulations 8-2009 has required political candidates, political parties and contributors to register with the BIR as withholding agents.
Under Revenue Regulation 8-2009 also known as "Project: Iboto Mo", all income payments made by political parties and candidates of local and national elections on their purchase of goods and services for their campaign shall be subject to a five percent Creditable Withholding Tax (CWT). Individuals, corporations, associations and other juridical persons are also required to impose the five percent withholding tax on their purchases of goods and services that are intended as campaign contributions to political parties and candidates.
Revenue Officer II Richard Daupan of the BIR office here, however clarified that the five percent CWT is not a tax imposed on the candidate, political party or contributor but on the supplier or provider of goods and services which is collected with the assistance of the candidates or contributors under the withholding tax system.
CWT is a tax on the income of suppliers of goods and services who will be earning income when they provide the materials and services for the campaign requirements of the candidates, political parties and contributors, Daupan said.
The candidates, political parties, and contributors as well as withholding agents will then remit the CWT they withheld within ten days after the end of each month which will eventually be deducted from the supplier's annual income tax.
Daupan said BIR has coordinated with the Commission on Elections to get the list of candidates, their addresses and their accredited political parties to match them with the bureau's registration system to determine if they are indeed registered as withholding agents as well as to monitor their compliance to the regulations.
Candidate, political party or contributor who does not comply with RR 8-2009 will be penalized and sanctioned under the Tax Code and its implementing rules and regulations.
Daupan said BIR personnel in the province headed by the Revenue District Officer P. George Caburao are now doing rounds of the different municipalities to brief the candidates, political parties and contributors on the provisions of RR 8-2009.
The BIR look at election period as big source of tax revenues as candidates in the various elected positions in the local and national level, their political parties and supporters are expected to incur huge campaign expenditures.
The revenue generating office expect to collect some P1.2 Billion nationwide from the five percent withholding tax on all political contributions and campaign expenditures of candidates in the May Elections. (PIA MP) [top]