The Bureau of Internal Revenue (BIR) asked on Saturday candidates in next year's national and local elections to start registering as tax withholding agents as the period for filing of certificates of candidacies (CoCs) with the Commission on Elections (Comelec) has begun.

BIR Commissioner Joel Tan-Torres issued the reminder as he discussed with newsmen the controversial revenue regulation imposing the five percent withholding tax on political expenses at the Balitaan sa Rembrandt forum.

He said the BIR will impose civil and even criminal sanctions on the candidates if they fail to register with the bureau and remit the said tax.

“We will exhaust all legal remedies before imposing sanctions, including the collection of the usual 25-percent surcharge and 20-percent penalty for late remittance,” he said.

Tan-Torres, however, stressed that candidates should comply with the requirement if they really love their country as taxes is the lifeblood of running the affairs of the government.

He said the measure is not a tax on cash contributions to candidates or political parties as it is imposed only when financial donations are spent.

“Insofar as the campaign expenses are concerned, the candidate or political party shall be the withholding agent as well as contributors of campaign materials and services,” the revenue chief said.

As withholding agents, the candidates should withhold five percent when purchasing campaign materials and services.

To illustrate, Tan-Torres said if the candidate spent P100,000 for purchase of campaign T-shirts, he should only pay the seller P95,000 and the balance should be remitted to the BIR.

Tan Torres also explained that the imposition of the five-percent withholding tax on campaign expenses is only one of the measures to increase the government's revenue take in the remaining two months of the year. The BIR is expected to generate P1.5 billion from this source. The revenue chief conceded that the huge collection shortfall of P39 billion sustained during the first nine months of the year can no longer be filled up, adding that “we are concentrating all our efforts to meet the collection target for November and December which totaled to around P130 billion.”

The BIR was tasked to raise P798 billion for the year, a goal that has become unrealistic due to worldwide economic recession and the passage of tax eroding laws like the reduction of corporate income tax and higher tax exemption grants for individual taxpayers.