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BIR reminds candidates of tax obligations

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BIR building
The Bureau of Internal Revenue head office in Quezon City -- BW FILE PHOTO

THE BUREAU of Internal Revenue (BIR) outlined the tax duties of candidates for the midterm elections, which covers their campaign expenses and contributions.

BIR Commissioner Caesar R. Dulay signed Revenue Memorandum Circular (RMC) 31-2019 reminding of the tax liabilities for the May 13 senatorial and local elections, which include candidates, political parties, party-list groups and campaign donors.

The March 7 issuance reiterates the contents of a 2018 circular that requires candidates, parties and party-lists, and campaign contributors to register with the revenue district offices (RDOs) with jurisdiction over their business addresses.

“All candidates and political parties/party list groups shall also register non-VAT (value added tax) official receipts to be issued for every contribution received, whether in cash or in kind valued at fair market value,” the RMC read.

All campaign expenses as well as payments made as campaign contributions are likewise subject to a five percent creditable withholding tax (CWT), which must then be remitted to the BIR.

“Expenses that were not subjected to the 5% CWT are not considered utilized campaign funds, and the candidates, political parties/ party-list groups are precluded from claiming such expenditures as deductions from his/her/its campaign contributions,” the BIR added. “As such, the full amount corresponding to said expense shall be reported as unutilized campaign funds subject to income tax.”




Only campaign donations which were spent during the official campaign period are exempted from donor’s tax, the bureau clarified. Unused or excess campaign funds will then be subject to income tax and reflected in a candidate or group’s income tax return for the year.

The candidates also need to maintain a cash receipts journal and cash disbursements book, both of which are also used as the basis for their submissions to the Commission on Elections (Comelec). These records must be kept intact for the next three years.

To add, they must also submit the Statement of Contributions and Expenditures to both the Comelec and the RDO within 30 days after election day. — Melissa Luz T. Lopez

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