THE Bureau of Internal Revenue (BIR) told political candidates to report their unused contributions as income, to maintain up-to-date tax registrations, and to issue receipts for political contributions.

The BIR issued the reminders in Circular No. 22-2022, which applies to all candidates, political parties, party-list groups, and campaign contributors.

In most cases, campaign contributions are not classified as taxable income because they are typically not used for personal spending, the BIR said. However, campaign funds that were either unused or used before the campaign period are subject to income tax and must be declared on income tax returns.

“Thus, to be considered as exempt from the income tax, these campaign contributions must have been utilized to cover a candidate’s expenditures for his/her electoral campaign during the campaign period,” the BIR said.

The circular, released on Monday, requires all candidates and political organizations to issue non-VAT (value-added tax) official receipts for every contribution received, whether in cash or in kind, at fair market value.

Similarly, only donations used during the campaign period are exempt from donor’s tax.

The campaign period officially began on Feb. 8. The elections will be held on May 9.

Goods and services purchased with campaign funds are subject to 5% creditable withholding tax. These include payments for media services, printing, entertainment, and property rental.

The use of land and equipment free of charge for the campaign should be declared as expenses, based on prevailing rates.

The Omnibus Election Code requires all political candidates and groups are required to keep a record of contributions and expenses. After the election, they must submit a statement of these contributions and spending to the Commission on Elections.  Jenina P. Ibañez