Enrile says 5% tax on political ads has legal basis

By Jelly F. Musico

MANILA, Nov. 5 (PNA) –- Senate President Juan Ponce Enrile defended the Bureau of Internal Revenue (BIR)’s imposition of five percent withholding tax on the political ads of the candidates, saying it has no legal impediment.

”There’s a law already and it’s in the Internal Revenue Code of 1997,” Enrile said in an ambush interview.

Enrile, however, clarified that it’s not only the candidates in the 2010 elections who should pay tax but also the television and radio stations who are being paid to advertise the political ads.

”The candidates will simply withhold the tax of five percent but it will be the radio or television stations that will bear the tax,” Enrile who is seeking reelection next year.

The veteran lawmaker said that the only problem is whether or not the candidates will remit the five percent withholding tax to the government.

”It is very difficult to administer this law. Like for example when anonymous donated t-shirt for a candidate, who will be charged of the withholding tax. How you will trace the donor,” Enrile explained.

Enrile said it is the duty of the BIR to collect the tax including the government plans to collect taxes in the Christmas bazaar.

”Everybody must pay taxes. It’s not new tax measure. When you do an economic activity, it is subject to tax, subject to vat (value added tax), if you make a profit, the profit is subject to income tax,” he explained.

Senator Francis "Chiz" Escudero has also supported the imposition of five percent tax on campaign and political contributions.

”If that is in the law, I will support that move. It is only proper to impose tax on the campaign spending and political contributions of the candidates,” said Escudero who remains undecided whether or not to run for higher position.

The government’s move to impose tax on the political campaign contributions is based on the revenue regulation 8-09 of the BIR that requires political candidates, parties, and contributions to register with the BIR.

Senator Richard Gordon also supports the five percent withholding tax imposition announced by Bureau of Internal Revenue (BIR) officer-in-charge Joel Tan-Torres.

Tan-Torres replaced Sixto Esquivias IV who resigned as BIR commissioner after failing to meet the revenue collection target of the BIR.

The newly-issued BIR regulation aims to help the bureau achieve its whole year target of P798.5 billion revenue collection.

Aside from tax on political campaign contributions, the BIR will also strengthen monitoring of bazaars and retailers this Christmas to increase its collections.

From January to September this year, the BIR collected only P557 billion, P39.2 billion lower than its goals for the period. (PNA)