BIR going after star endorsers

MANILA, Philippines - The Bureau of Internal Revenue (BIR) will go after celebrities endorsing or campaigning for candidates in the May 10 elections to make sure that they pay the proper taxes for such services.

“They get income for that so they should pay the tax,” BIR Deputy Commissioner for Legal and Inspection Group Gregorio Cabantac said.

He said campaigning or endorsing candidates is no different from other activities of celebrities, including product endorsements, hosting jobs and party appearances, which are all subject to income tax.

While admitting that some celebrities offer their services to candidates for free, Cabantac said this is not usually the case.

Asked how the BIR would be able to monitor such paid endorsements, Cabantac said the revenue agency would be fielding special teams during the election season. He also said that politicians should ask celebrities for receipts when paying them for endorsements.

Last week, the Commission on Elections (Comelec) said celebrities campaigning for candidates should take a leave of absence from their work in show business.

Comelec officials said that Republic Act 9006 or the Fair Elections Act prohibits actors from making television appearances once they have endorsed or volunteered for a candidate during the campaign period.

The campaign period for national candidates is from Feb. 9 to May 8. Campaign period for local candidates starts on March 26.

Collection estimate

Meanwhile, BIR Commissioner Joel Tan-Torres said they expect to raise P1.2 billion to P1.4 billion this year from the five percent withholding tax on all political contributions and campaign expenditures of candidates in the May elections.

The BIR is ready to implement the tax measure now that the Comelec has released the complete list of candidates.

Last year, the BIR issued Revenue Regulation 8-09 requiring political candidates, political parties and contributors to register with the BIR as withholding agents.

The BIR has been looking for possible sources of revenues amid the government’s widening budget deficit.

The agency said it has been missing its collection targets because of the global financial crisis which has dampened economic activity.

It expects to collect roughly P830 billion this year, lower than the initial estimate of P875 billion.

In January, the BIR collected P61.67 billion, exceeding by P5.67 billion its P56-billion target for the period. The January collections also topped the P55.3 billion collected in the same period last year, data showed.

Not covered

While determined to restrict campaign advertisements in mass media and in the streets, the Comelec declared it is not regulating campaign materials on vehicles.

Comelec Commissioner Gregorio Larrazabal said posting large images of candidates on public vehicles “is not part of the unlawful campaign acts provided” under Comelec Resolution 8758.

The resolution contains the implementing guidelines of Republic Act 9006 or the Fair Elections Act.

Comelec Commissioner Nicodemo Ferrer shared the same opinion.

“If a private individual wants to make use of his private property, provided that it’s not contrary to law, that should be allowed,” he said.

Asked if the sizes of stickers or posters need to follow the limits set in the law, Ferrer said there is nothing in the law that sets such limits.

“We will have to discuss that because we are still talking about private property,” he said.

“We have to balance that with the Fair Elections Act,” he added.

The law limits the size of campaign billboards to eight inches by 14 inches and posters to two by three feet.           

Ferrer said the recent campaign of the Metro Manila Development Authority to round up buses with election stickers is not in accordance with the law.

“At this stage, we doubt the legality of that,” he said. With Sheila Crisostomo