BIR Reminds 2022 Political Candidates To Comply With Tax Obligations

On 21 February 2022, the Bureau of Internal Revenue (“BIR”) issued Revenue Memorandum Circular No. 22-2022 (“RMC 22-2022”), which serves as a reminder to the candidates running in the 2022 national and local elections of their tax obligations. 

The tax obligations of political candidates for the 2022 national and local elections are as follows:

1. Obligation to register – The candidates, political parties/party list groups and campaign contributors are reminded to register with the BIR, issue official receipts and withhold taxes. The registration shall be made with the Revenue District Office (“RDO”) having jurisdiction over the political subdivision where the candidate is seeking election, and, if this is not applicable, registration shall be made at the RDO having jurisdiction over their principal residence or registered head/principal office address similar to the registration of political parties or party list groups.

Individual campaign contributors shall be registered under Executive Order 98 as taxpayer type with the RDO having jurisdiction over his place of residence while the nonindividual campaign contributors shall be registered with the RDO having jurisdiction over its principal place of business/head office. 

2. Obligation to pay Annual Registration Fee (ARF) – All candidates and political parties/party list groups shall pay an ARF of Five Hundred Pesos (PHP500.00) and thereafter, they shall be issued a Certificate of Registration. 

3. Obligation to register and preserve books and accounting records – Candidates are also required to keep books and other accounting records, such as Cash Receipts Journal and Cash Disbursement Book, and register the same with the concerned RDO. Individual candidates may opt to use a simplified set of bookkeeping records, as long as it can provide accurate information.

Apart from that, they shall also register Non-VAT Official Receipts (“ORs”) to be issued for every contribution received. 

All political parties/party list groups and candidates shall be responsible for the preservation of records and contributions and expenditures, together with all pertinent documents. The foregoing documents shall be retained in accordance with the rules on preservation of books of accounts and other accounting records provided in Section 235, in relation to Sections 203 and 222 of the NIRC.

4. Obligation to submit the Statement of Contributions and Expenditures – Every candidate and Treasurer of the political parties/party list groups shall submit the Statement of Contributions and Expenditures to the Commission on Elections and RDO where they are registered within thirty (30) days after the elections.

All candidates, political parties and party list groups who failed to register and comply with the requirements of the BIR will be subjected to penalties under the Revised Consolidated Schedule of Compromise Penalties for Violations of the National Internal Revenue Code, as amended by Revenue Memorandum Order No. 7-2015.