The Bureau of Internal Revenue (BIR) reminded all candidates and political parties to register with the agency as withholding tax agents and likewise issue official receipts to individuals and entities giving them campaign funds.
Revenue regional directors stressed that contributions in cash, or in kind to those running for public office are exempted from donor's tax under the Omnibus Election Code.
However, expenses during the campaign like purchases of campaign materials and talent fees of entertainers are subject to five percent creditable withholding tax.
Revenue field officials pointed out that both winners and losers are liable to pay income tax on unspent contributions, unless returned to donors.
They said the tax compliance should be reflected in the Statement of Contributions and Expenditures (SOCE) that candidates and political parties are required to submit to the Commission on Elections within 30 days after the election.
Revenue officials said all donations will be subject to income tax if candidates, or political parties fail to submit SOCE.