Election 2010!

BIR may miss P1.2-B election tax take target
March 18, 2010 20:53:00
Ronnel Domingo
Philippine Daily Inquirer

MANILA, Philippines--The Bureau of Internal Revenue expects to get some P100 million this month from the imposition of the 5-percent withholding tax on campaign expenses following the start of the campaign season in February.

But Revenue Commissioner Joel L. Tan-Torres said the target collection of P1.2 billion for the full-length of the election campaign might not be achieved due to shorter-than-assumed collection period.

Tan-Torres explained that when the program dubbed “Iboto Mo Kandidato, Nagbabayad ng Buwis na Wasto” was being planned last year, the BIR’s assumption was that collection would start in December 2009 when the filing of COCs was opened, instead of February 2010 when the campaign period started.

“We expect all (campaign) taxes to be fully remitted by June,” the BIR chief said. “Revenue officials will coordinate with the candidates to remind them that they have to pay taxes.”

Revenue Memorandum Order No. 35-2009 issued on Nov. 11, 2010 tasked revenue district offices to work with offices of the Commission on Election and issue BIR registration forms to all candidates during the filing of the certificates of candidacy from late November to early December.

The BIR will also work with the Comelec in relation to candidates’ and parties’ statements of campaign expenditures and contributions, which will be available by June 2010, for auditing purposes.

Tan-Torres said the 5-percent withholding tax was not a new tax and therefore, a new law was not needed to make it effective.

“The withholding tax is an advance payment of income tax and this system has been in place for the past 30 years,” he said.

What was new, Tan-Torres said, was the inclusion of transactions related to the purchase of goods and services for the election campaign.

“There is no additional cost for the candidate and the contributor does not pay tax on contributions,” he added.

Asked about the problem of collecting the tax when campaign funds are not reported anyway, Tan-Torres said the BIR would be satisfied to cover whatever amount was declared.

“But (the candidates) are assured that all information that we get will be very confidential and will not be available to rival parties,” he said.

“The law prohibits us from disclosing information related to taxes.”

Citing the Tax Code, he said parties who were remiss in their tax responsibilities were liable to pay a penalty equivalent to 25 percent of the unpaid tax plus a 20-percent yearly surcharge.

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