ASIDE from obeying the provisions of the Omnibus Election Code, another test for the candidates' obedience is whether they actually follow the new mandate of the Bureau of Internal Revenue (BIR).

BIR has a mandatory imposition of a 5 percent withholding tax on contributions made for the campaign of a candidate.

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"We sent out more than 40 letters to mostly local candidates within our area, but so far, only two have responded," Revenue District Collector Noel Gonzales, chief of BIR West Davao, said.

"We shall be sending them letters again."

The action of Gonzales to urge candidates to impose the 5 percent withholding tax on campaign contributions is based on Revenue Regulations No. 8-2009, which states that all candidates, political parties, campaign contributors, and supporters are mandated by their civic duty to comply with tax obligations.

"All income payments for purchases of goods and services made by political parties, candidates of local and national elections, and individuals or juridical persons, as election campaign expenditures or campaign contributions to political parties and candidates, are subject to 5 percent withholding tax," the Revenue Regulation said.

Gonzales said that they have also alerted the printing presses and other establishments that are usually utilized during the campaign season with regard the 5 percent withholding tax that is currently being imposed.

"The candidate has to register with us so we can expand the candidate’s tax type and include the expanded withholding tax," Gonzales said, adding that most candidates do not have the expanded withholding tax category.

The five percent expanded withholding tax is not taxed upon the candidate, political party or contributor. Instead it is taxed upon the supplier of goods and services.

If a candidate purchased campaign paraphernalia amounting to P100,000, only 95 percent or P95,000 shall be paid to the service provider and the 5 percent shall be remitted to the BIR.

The supplier can then declare the expanded withholding tax and deduct it from their total income tax liability upon the filing of the income tax returns next year.

"They can send their representative or better yet they can personally come here and ask us what should be done," Gonzales said. (CPM)