Can candidates, parties keep unused campaign donations? BIR weighs in

MANILA — The Bureau of Internal Revenue (BIR) on Thursday urged candidates and political parties in the midterm elections to comply with tax regulations regarding campaign regulations and spending, saying this is their obligation and responsibility.

BIR Commissioner Romeo Lumagui, Jr. said candidates and political parties should register with his agency if they are accepting campaign contributions and if they are spending for their campaign.

“Kapag magbabayad sila sa kanilang mga suppliers, kinakailangan nilang mag-withhold ng 5 percent doon sa kanilang mga supplier,” Lumagui said in an interview on state-run PTV.

“Pag sobra ang natanggap nilang contribution sa ginastos nila, kinakailangan nila bayaran ang income tax tungkol dito sa sobrang tinanggap nila,” he said.

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They should also apply for non-VAT invoices, the official noted, and receipts and invoices should be issued to donors – whether the donations were cash or in kind.

“Doon sa expenses nila, kinakailangan nilang ilista lahat yan at isa-submit din yan sa Statement of Contributions and Expenditures sa Comelec pati na rin dito sa ahensya para makita namin lahat complied ang obligasyon dito,” he said.

Asked if candidates and political parties could keep the unused donations, the BIR chief answered in the affirmative.

“Puwede nilang itago, wala namang problema diyan basta bayaran nila ang income tax diyan. Yung kanilang tinanggap, ibabawas yung ginastos nila at kinakailangan magbayad ng tax,” he said.

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“Kapag hindi nila nagawa ito, ang mga prosesong yan, may kaukulang penalties yan. Maituturing na tax evasion din yan kaya kung mapatunayan ay may kakaharapin silang kasong kriminal at iba pa rin ang usapin ng consequence sa Comelec dahil may ground ito na disqualification,” he said.

According to the country's synchronized elections law, SOCE non-filers will be fined and subjected to perpetual disqualification from holding any public office.

In 2017, the Supreme Court also ruled that candidates running for an elective post who failed to file twice their campaign expense reports within 30 days from election day are perpetually disqualified from holding public office.

Section 14 of Republic Act 7166 requires every candidate and political party to file with the Comelec the full, true, and itemized SOCEs within 30 days after the Election Day.

Under the law, no person elected to any public offices shall enter upon the duties of their office until they have filed their SOCE.