Donations to candidate during election are tax exempt

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BIR logoNAGA CITY (23-Mar-21013) – The Bureau of Internal Revenue (BIR) has clarified that donations given to candidates are exempted from taxes.

Socorro Lafuente, revenue district officer (RDO) of Naga City, said she failed to mention this exemption in an earlier interview and wanted to add it to complete the information regarding BIR’s monitoring of candidates’ donations.

“Donation per se is an exemption to the general rule of donation. However, if they use the donation, the money donated becomes subject to five percent withholding tax,” Lafuente said.

The BIR requires the candidates in the 2013 elections to record their donations and expenses in book accounts to monitor the taxable items they receive and spend.

Lafuente said the BIR is requiring all candidates to register their names and books of accounts and their tax identification number (TIN) for the BIR monitoring of collectible items.

The campaign to require all candidates and party-list groups to maintain records of donations and expenditures kicked off nationwide Friday last week with the conduct of orientation meeting with them or their representatives.

Lafuente said the monitoring of donations and expenses of candidates is being implemented by the BIR based on Memorandum Circular No. 15-2013 following issuance by the Commission on Elections (Comelec) rules and regulations governing finance and disclosure in connection with the May 2013 elections.

She said it shall be the duty of every candidate, treasurer of the party and person acting under authority of that candidate or treasurer to issue receipt for every contribution received and to obtain and keep receipts, stating the particulars of expenditures made.

Lafuente said the candidates and Party-list groups are expected to keep detailed, full and accurate records of all contributions received and expenditures they have incurred.

She added that they are aldo required to issue official receipts at least in duplicate registered with the revenue district office and preserve for three years the records of contributions and expenditures for future references.

Lafuente disclosed that the donations are taxed accordingly, depending on the amount with P50,000 and less exempted from taxes while a minimum of 1.5 percent will be collected for donations from P50,000-100,000.

She said the bigger the donation, the bigger the taxes with over P5 million donation with minimum tax of P358,750 plus 20 percent in excess of P5 million

Lafuente said the books of account pertaining to donations and expenditures are automatically ended 30 days from the date of elections. [PNA]

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