No need for new law on campaign tax - GMA lawyer

MANILA, Philippines - Malacañang yesterday assured politicians not to be concerned over the imposition of the campaign tax since it would not directly affect them.

Deputy presidential spokesperson Anthony Golez explained the five- percent campaign tax is not a new scheme of taxation since it has been implemented for more than 30 years.

Golez said the campaign tax is not directly imposed on the politician but on the supplier of goods and services used during the campaign period.

Simply put, Golez said the campaign tax could be likened to the withholding tax being collected by the Bureau of Internal Revenue on all business transactions.

“So the point on the five-percent withholding tax is not on the contribution but rather it is a tax on the supplier of goods and services and it is collected through the withholding tax system,” he said.

Golez said the concerns raised by the opposition candidates that the tax would be used to harass them have no basis.

Golez said the payment of taxes applies to everyone regardless of political affiliation.

“So it would not be fair to say that the opposition would be at a disadvantage because they are the ones being taxed,” Golez pointed out.

Golez called on the BIR to clarify the issue and launch an information campaign to clear up the misconceptions on the imposition of campaign taxes ahead of the election period.

“The important thing is that it is not illegal, it is not unconstitutional as what was alleged,” he said.

Election lawyer Romulo Macalintal also explained the imposition of the campaign tax is not a violation of the Constitution, as it is a tax scheme covered by the Internal Revenue Code.

Macalintal said the campaign tax is imposed on campaign expenditures. He said the tax could be considered a form of withholding tax that does not need to be subjected to legislation by Congress.

“For example if a candidate spends P100,000 for advertisement on television, he will withhold five- percent or P5,000 for (the) BIR and pay the media only P95,000 and remit P5,000 to (the) BIR. So it will have no effect on candidates,” Macalintal pointed out.

The BIR and Senate President Juan Ponce Enrile earlier said the Internal Revenue Code of 1997 already covered the tax on campaign spending.

The BIR, through Revenue Regulations No. 8-09, requires all political candidates and their supporters to set aside five percent of their campaign kitty for withholding tax.

The order also tasks political parties and their candidates to register with the BIR as “withholding agents.”

Double taxation

Some lawmakers, however, disputed the legality of the imposition of the campaign tax.

According to Quezon Rep. Danilo Suarez, the imposition of campaign tax amounts to “double taxation,” which is illegal under the Internal Revenue Code.

Suarez said if the campaign tax is collected from a donor with a legitimate source of income and who pays the correct amount of income tax, this taxpayer pays levies twice.

“He pays tax on his income from which his donation came and then pays a campaign tax,” he said.

Suarez said if the campaign levy were imposed on the suppliers of politicians, these taxpayers would also be hit by double or triple taxation since they are now subject to the 12-percent value-added tax and income tax.

He pointed out that if a donor were one with no legitimate source of earnings, he and the recipient of his money would not report the donation or contribution.

“Even big corporations and wealthy businessmen do not declare their contributions,” Suarez said.

“This thing is easier said than done. It is intended only for media mileage. The BIR should junk the idea,” he added.

Suarez, one of the taxmen in the House of Representatives, suggested that the BIR should look for other sources of revenues to shore up dwindling government income.

Presidential hopeful Sen. Benigno “Noynoy” Aquino III also expressed doubts on the fair implementation of the campaign tax. – With Aurea Calica, Sheila Crisostomo, Jess Diaz, Jose Rodel Clapano