Election bets need to pay withholding tax on campaign expenditures

Candidates for the May 2022 election, either individuals or political parties including campaign contributors, are required to pay the Bureau of Internal Revenue (BIR) the withholding tax on campaign expenditures.

They also need to issue official receipts and withhold taxes pursuant to Revenue Regulations (RR) No. 8-2009 as amended by RR No. 7-2011 and other related revenue issuances. The registration of political parties or party list groups shall be made with the Revenue District Office (RDO).

According to OIC-Revenue District Officer Richard R. Oquendo of the Revenue District 78 in Binalbagan, Negros Occidental, Revenue Memorandum Circular (RMC) No. 22-2022 provides that individual candidates are required to accomplish BIR form 1901, a copy of the Certificate of Candidacy (COC) and valid IDs. Political parties/party list groups need to accomplish BIR form 1903 and submit a copy of the COC.

Similarly, Oquendo said that all candidates and party list groups shall have to pay an annual registration fee (ARF) with the BIR.

He also emphasized that candidates/groups that purchase goods and services as campaign expenditures and income payments made by individuals and juridical persons for their acquisition of goods and services intended to be given as campaign contributions to political parties and candidates shall be subject to 5% creditable withholding tax (CWT).

This is pursuant to BIR RR 11-2018. Covered by the expanded withholding tax are media services, printing jobs, talent and entertainment fees, rentals of real and personal properties, among others.

It has been noticed that spending during the local and national elections are mostly on the election paraphernalia seen along the roads and barangays as well as the use of radio stations and television networks that endorses candidates and political groups.

Oquendo said re-electionist candidates are aware of these regulations that have been required for 24 years. Withheld amounts for the supplier of goods and services are allowed as tax credit or deduction against total income tax liability.

He added that this year’s tax campaign theme “Pagbabayad ng Buwis sa Bayan, Tatak ng Kabayanihan” emphasizes the heroism of taxpayers giving their fair share of taxes even during the most difficult time in this pandemic.

The theme also expresses that taxpayers are among the modern-day heroes whose tax payments, big or small, strongly support the country’s economic recovery and uplifting of lives of all Filipinos.

Meanwhile, Oquendo is reminding all taxpayers that the annual income tax return (AITR) filing is ongoing which is due on or before April 18, 2022 the last day of filing. He urges taxpayers to file early to avoid the last-minute filing of the annual ITR.