BIR eyes up to P1.4-B from election-related taxes
abs-cbnNEWS.com | 10/26/2009 8:41 PM
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MANILA - The Bureau of Internal Revenue (BIR) is eyeing to raise between P1 billion and P1.4 billion from taxes on election campaign expenditures.
"In terms of taxes arising from this, including the 5% witholding tax and penalties, total taxes are expected to amount to P1 billion to P1.4 billion," BIR senior deputy commisioner Joel Tan Torres told reporters on Monday.
The BIR has issued Revenue Regulation 8-09 wherein it will slap a 5% withholding tax on all political contributions and campaign expenditures of candidates running for public office next year.
All candidates, political parties and contributors must register with the BIR as withholding agents, and will be required to get official receipts for goods and services they avail of for their campaign activities. They must also submit a statement of their expenditures.
Toress clarified though that the 5% witholding tax would not be imposed on candidates, but will be deducted on their payments to suppliers of goods and services. "There should be no additional cost to candidates," he said.
Torres said suppliers include printing press, media and advertising groups, suppliers of campaign materials, T-shirts, calendars and other materials to be used for the campaign period, and even entertainers.
He also explained that while cash donations to candidates will not be taxed, the candidates should automatically withhold 5% on the amount, if he uses the money to purchase goods and services from the suppliers.
This means for a P100 purchase of campaign material, the candidate, as a withholding agent, should pay only P95 to the supplier and the balance of P5 to the BIR.
"It is the civic duty of the candidates in assisting the BIR in the collection of taxes as witholding tax agents," Torres said.
Torres said the agency will conduct a nationwide campaign to "make everybody aware of the requirements for compliance."
The new regulation will help the BIR in achieving its target collection of P798 billion this year.
"We are not in a position to attain the whole P798 billion... but we will still try," he said.
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