AHEAD of the elections in May, the Bureau of Internal Revenue (BIR) has reminded not only those running for public office but also their political parties and supporters to pay their obligations for donations that will exceed actual, tax-exempt campaign expenditures.
In a statement Friday, the BIR reminded all candidates, political parties, party-list groups and campaign contributors to register and secure official receipts, as mandated under regulations earlier issued by the agency.
Under BIR rules, political parties and party-list groups must register with the revenue district offices (RDOs) that have jurisdiction over their head or principal offices.
As for individual candidates, they should register with the RDOs having jurisdiction over the political subdivisions where they are seeking election or at the RDOs that have jurisdiction over their principal residence or registered address, the BIR said.
鈥淯pon registration, the BIR will tag them as withholding tax agents, among others. As withholding agents, they must withhold the corresponding withholding tax for election-related expenses such as, but not limited to, purchases of campaign materials like tarpaulins, T-shirts, boleros, fans, flyers, talent fees of the composer and singer of the campaign jingle and others related thereto,鈥� the BIR said.
The country鈥檚 biggest tax-collection agency reiterated that 鈥渁ll contributions received shall be reported as required by law.鈥�
鈥淎ny unused/excess funds shall be treated as income for purposes of taxation pursuant to Revenue Regulations No. 07-2011 dated Feb. 16, 2011, which provides the tax treatment of campaign contributions and expenditures,鈥� according to the BIR.
鈥淎ny single nonissuance of official receipt upon receipt of contribution shall be penalized with a fine of not less than P1,000 but not more than P50,000 and imprisonment of not less than four years as stipulated in Revenue Memorandum Order No. 7-2015,鈥� it said.
The BIR said all expenditures incurred due to the elections must be reported.
鈥淯nreported expenses, as well as those not subjected to appropriate withholding tax, shall not be allowed as deductions from contributions. Excess contributions will be treated as income subject to income tax,鈥� it said.
According to the BIR, 鈥渢he registration of individual candidates shall automatically end after 30 days from the date of election鈥� while those for political parties and party-list groups 鈥渟hall subsist.鈥�