By ELLEN TORDESILLAS
ALL contributions to political campaigns will be taxed 5 percent, the Bureau of Internal Revenue said Friday.
BIR Commissioner Sixto S. Esquivias IV announced that the newly issued Revenue Regulations No. 8-09 requires all political candidates, parties and contributors to effect a 5 percent withholding tax on their campaign expenditures and contributions.
The new regulations also require all political candidates, parties and candidates to register with the BIR as a withholding agent.
Makati Mayor Jejomar Binay, who is running for vice president in the 2010 elections, assailed the directive as a “squeeze play by Arroyo administration on the sources of financial support for the opposition.”
“Clearly, the administration has found a convenient excuse to pin down opposition supporters especially within the ranks of the business community. As a result, businessmen would think twice before giving donations, and as a result they will be reluctant to donate to opposition candidates,” Binay said.
Esquivas made the announcement with Senior Deputy Commissioner Joel L.Tan Torres during the launching of “Iboto Mo Kandidato, Nagbabayad ng Buwis na Wasto” a BIR project directed to maximize tax collections from campaign expenditures and contributions.
He said “candidates have a civic duty of assisting in nation building, which can be attained with them being involved in complying with their tax obligations.”
Esquivias also reminded all candidates, political parties and contributors, compliance with their tax obligations like the remittance of their expanded withholding tax (BIR Form No. 1601E), issuance of the corresponding BIR Certificate 2307 and requiring the issuance of official receipts from their supplier of goods and services.
Tan-Torres also disclosed that BIR will be partnering with the Commission on Elections to ensure that the candidates, their supporters and parties comply with their tax obligations. A memorandum of agreement is currently being reviewed by representatives of the BIR and Comelec.
“Furthermore, all our BIR offices throughout the Philippines will be conducting briefings to all candidates running for elective positions to educate them on their tax compliance responsibilities,” he said.
Binay said the administration is rewriting the rules of the 2010 election to favor its candidates who will benefit from the use of government resources and whose financial backers are assured of preferential treatment.
He noted that the BIR has again failed to meet its target from January to September, with collections totalling P839.8 billion or 4.6 percent lower than the collections for the same period last year.