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Comelec, BIR thresh out 5% campaign tax 'row'


The process of collecting the five-percent tax on campaign contributions has become a contentious issue between the Commission on Elections (Comelec) and the Bureau of Internal Revenue (BIR). Comelec Chairman Jose Melo on Tuesday said the two agencies met Monday to thresh out potential problems surrounding the BIR's newest initiative. "Tine-thresh out namin yan ... Kunwari ang kandidato bumili ng T-shirt, sumbrero, siya ang mag-retain ng 5% withholding tax at siya ang magbabayad sa BIR, at hindi ang pinagbilhan (We are still threshing out the matter. We would prefer that the supplier of campaign materials retain the 5 percent withholding tax and remit it to the BIR, rather than the candidate who make purchases)," Melo said in an interview on dwIZ radio. Earlier, the BIR said it will impose a five-percent tax on contributions to political campaigns. Revenue Regulation No. 8-09 requires all political candidates, parties and contributors to effect a five-percent withholding tax on their campaign expenditures and contributions. The new regulations also require all political candidates, parties and candidates to register with the BIR as a withholding agent. Makati Mayor Jejomar Binay, running for vice president in the 2010 elections, claimed the tax is a "squeeze play" on the sources of financial support for the opposition. Melo, however, said the Comelec expects resistance to the new tax. "Wika ko, we'll encounter a lot of resistance. Kailan ba nangyari na ang purchaser ang nagre-retain ng withholding tax? (I said we may encounter a lot of resistance. When has a purchaser retained the withholding tax)?" - GMANews.TV

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