By Malou Mangahas (Malaya) Philippine Center for Investigative Journalism
http://www.malaya.com.ph/03232010/news4.html
THEY probably thought they got a free pass to flood television with political ads beyond the airtime and spending limits set in law, having run commercials before the 90-day campaign period could start last February 9.
But the top candidates for president and vice president, as well as those who donated and bankrolled their pre-campaign ads, had better think again, according to lawyers and officials of the Bureau of Internal Revenue (BIR).
By the letter and spirit of anti-graft and tax laws, say the lawyers and tax officials, their pre-campaign period airing of political ads does not free the candidates and their donors of all liabilities.
By PCIJ’s calculations, the combined actual ad spending of six presidential candidates and four vice-presidential candidates from November 1, 2009 to February 8, 2010 comes up to P1.472 billion. By most standards, the amount is huge enough to compromise these candidates, most of whom are incumbent public officials.
The figure is also huge enough to shore up the tax collection drive of the BIR amid the country’s rising fiscal deficit -- if the candidates’ donors have paid taxes.
Just last week, BIR Commissioner Joel Tan-Torres said his agency has collected only P100 million from the five-percent withholding tax slapped on all political contributions and campaign expenditures of candidates during the campaign period.
The amount is just a fraction of the BIR’s target to collect P1.2 billion from the five-percent withholding tax because it applies only to the official campaign period from Feb. 9 to May 8 for national candidates, and from March 26 to May 8 for local candidates.
Tan-Torres told reporters that the P1.2-billion projected collections covered the period from December 2009, or after the period for filing of candidacy up to the May elections. He said he expects to increase "by hundreds of millions" the tax yield from campaign expenses in the coming weeks. Then again, perhaps Tan-Torres should look farther back, or before the campaign period commenced.
In truth, on the part of the candidates who are incumbent senators, mayors, and public officials, the Code of Conduct and Ethical Standards for Public Officials and Employees or Republic Act No. 6713 stipulates that they should not receive any gifts or donations of any sort or amount.
On the part of the still unnamed donors, whether private persons or corporate entities, tax laws prescribe that they should have paid donors’ taxes on the amounts they gave to finance their favored candidates’ political ads. These donors, moreover, should have reported and paid the donors’ tax within 30 days from the date of transaction, or until last March 9.
Donations made to strangers (not related by blood or affinity to donee or beneficiary) are taxed a flat rate of 30 percent. Donations made to relatives entail payment of taxes of two percent to 15 percent, depending on the amount. Donations worth P10 million are imputed a flat tax of P1.04 million, and the excess amount an additional 15 percent.
A 30-percent flat tax on the total actual spending by six presidential candidates alone from November 1, 2009 to February 8, 2010 comes up to about P300 million, or thrice as much as what Tan-Torres said the BIR has collected until last week.
TEN BIG SPENDERS
Based on published rate cards of media agencies minus 50 percent in discounts and commissions , the top six candidates for president – Liberal Party’s Senator Benigno S. Aquino III, Nacionalista Party’s Senator Manuel Villar, Pwersa ng Masang Pilipino’s Joseph Estrada, Bagumbayan Party’s Senator Richard Gordon, Lakas-CMD’s Gilberto Teodoro Jr. (defense secretary until November 15, 2009), and Bangon Pilipinas’s Eddie Villanueva – had spent a total of P1.178 billion from November 1, 2009 to February 8, 2010.
Meanwhile the top four contenders for vice president -- LP’s Senator Manuel Roxas III, NP’s Senator Loren Legarda, PMP’s Makati Mayor Jejomar Binay, and Bagumbayan’s Bayani Fernando (Metro Manila Development Authority chief until late October) -- had spent a total of P294.41 million (again based on the published rate cards minus discounts and commissions) during the same period.
Of the 10 candidates who were the biggest spenders on pre-campaign political ads, five are senators (Aquino, Villar, Gordon, Roxas, Legarda), one a mayor (Binay), and two others, recently resigned executive officials (Teodoro and Fernando).
Another senator and presidential hopeful, Ma. Consuelo ‘Jamby’ Madrigal, had yet to air a political ad up to the end of the first month of the campaign.
Those among these candidates who are still public officials should not have received donations in cash or kind from any parties for political ads that focus primarily on their common pecuniary interest: To get elected to high office. Up until their respective resignations, this also applied to Teodoro and Fernando.
PAID FOR BY FRIENDS?
Taped copies of these candidates’ political ads that aired on national television before February 9 invariably carried the salutary notice, "paid for by friends of…."
Except for Villar, who has repeatedly said that he is spending his own money on political ads and has a declared net worth of P1.04 billion in 2008, there is hardly proof in their latest statements of assets, liabilities, and net worth (SALNs) that the nine other candidates could similarly draw from a deep well of personal funds to pay for their pre-campaign ads.
R.A. No. 6713 or the Code of Ethical Conduct for Public Officials and Employees prohibits the solicitation or acceptance, directly or indirectly, of any gift, gratuity, favor, entertainment, loan or anything of monetary value from any person in the course of their official duties, or in connection with any operation being regulated by, or any transaction which may be affected by the functions of their office.
Accepting such gifts or donations makes them liable for graft and conflict of interest, an offense punishable, including expulsion from public office, under election laws.
Unlike Villar, Teodoro – who began airing ads before his resignation as defense secretary -- and the rest of the candidates from the Senate are much less affluent. Separately, their claimed net worth in their latest Statements of Assets, Liabilities, and Net Worth are much smaller in value than the tons of money that they had splurged on political ads from November 2009 to February 8, 2010, according to the Nielsen Media database that PCIJ has analyzed.
For sure, election laws are largely silent on the limits and reporting requirements for pre-campaign expenses. The situation turned murkier when, in November 2009, the Supreme Court practically lifted the ban on pre-campaign activities
Section 15 of Republic Act No. 8436, as amended by Section 13 of R.A. No. 9369, provides that "any person who files his certificate of candidacy within the period for filing shall only be considered as a candidate at the start of the campaign period for which he filed his certificate of candidacy."
The third paragraph of the same provision states that "unlawful acts or omissions applicable to a candidate shall take effect only upon the start of the aforesaid campaign period."
NO CAMPAIGN, NO BET
It was this provision that the Supreme Court cited in its ruling last November that saw it reversing itself and saying that election offenses can be committed by a candidate "only" upon the start of the campaign period.
In the high tribunal’s own words: "Indeed, there is no ‘election campaign’ or ‘partisan political activity’ designed to promote the election or defeat of a particular candidate or candidates to public office simply because there is no ‘candidate’ to speak of prior to the start of the campaign period."
As a result, all unlawful acts and omissions applicable to a candidate were deemed to take effect only beginning February 9, and all prior partisan and campaign activities, beyond the purview of election laws.
Still and all, the high court’s decision did not suspend any other laws of the republic, notably those on the ethical conduct of public officials, and those on taxation, according to scholars from the University of the Philippines College of Law consulted by the PCIJ.
UP Law professor Solomon Lumba, a bar topnotcher, says the court’s decision affirmed as well that:
Incumbent public officials who filed certificates of candidacy are still considered public officials since he/she shall be deemed resigned only upon the start of the campaign period.
In this instance, all laws regarding conduct and discipline of public officers especially Republic Act No. 3019, Republic Act No. 6713, and Presidential Decree No. 46 still apply to all incumbent public officials who are also candidates.
The contributions made by private citizens and public and private institutions not prohibited by law to persons who have filed their certificates of candidacy cannot be governed by the election laws – and may not be exempted from taxes – since the latter is still not considered a candidate until the campaign period starts.
THIRTY-PERCENT TAX
By all indications, even in the BIR’s opinion, the candidates and their donors are not entirely without liability for spending oodles of money on pre-campaign ads.
BIR legal department head Maperoma Cantillep says that as a matter of law, even relatives by blood or affinity, within the fourth degree, who had donated to the candidates, have to pay tax. If they donate more than P100,000, fixed tax rates from two to 15 percent kick in.
Under this schedule defined in the Tax Code’s Sections 98 and 99, donations worth P10 million carry a flat tax of P1.04 million, and the excess, up to 15-percent tax.
Cantillap says that those who had donated more than P10 million to candidates who are "strangers" or not their relatives by blood of affinity, should have paid taxes equivalent to 30 percent of their total donations.
"Up-front buo na kaagad percentage tax n’yan," she says. "That should be 30 percent of the donation." Link: http://www.malaya.com.ph/03232010/news4.html
http://www.malaya.com.ph/03232010/news4.html
THEY probably thought they got a free pass to flood television with political ads beyond the airtime and spending limits set in law, having run commercials before the 90-day campaign period could start last February 9.
But the top candidates for president and vice president, as well as those who donated and bankrolled their pre-campaign ads, had better think again, according to lawyers and officials of the Bureau of Internal Revenue (BIR).
By the letter and spirit of anti-graft and tax laws, say the lawyers and tax officials, their pre-campaign period airing of political ads does not free the candidates and their donors of all liabilities.
By PCIJ’s calculations, the combined actual ad spending of six presidential candidates and four vice-presidential candidates from November 1, 2009 to February 8, 2010 comes up to P1.472 billion. By most standards, the amount is huge enough to compromise these candidates, most of whom are incumbent public officials.
The figure is also huge enough to shore up the tax collection drive of the BIR amid the country’s rising fiscal deficit -- if the candidates’ donors have paid taxes.
Just last week, BIR Commissioner Joel Tan-Torres said his agency has collected only P100 million from the five-percent withholding tax slapped on all political contributions and campaign expenditures of candidates during the campaign period.
The amount is just a fraction of the BIR’s target to collect P1.2 billion from the five-percent withholding tax because it applies only to the official campaign period from Feb. 9 to May 8 for national candidates, and from March 26 to May 8 for local candidates.
Tan-Torres told reporters that the P1.2-billion projected collections covered the period from December 2009, or after the period for filing of candidacy up to the May elections. He said he expects to increase "by hundreds of millions" the tax yield from campaign expenses in the coming weeks. Then again, perhaps Tan-Torres should look farther back, or before the campaign period commenced.
In truth, on the part of the candidates who are incumbent senators, mayors, and public officials, the Code of Conduct and Ethical Standards for Public Officials and Employees or Republic Act No. 6713 stipulates that they should not receive any gifts or donations of any sort or amount.
On the part of the still unnamed donors, whether private persons or corporate entities, tax laws prescribe that they should have paid donors’ taxes on the amounts they gave to finance their favored candidates’ political ads. These donors, moreover, should have reported and paid the donors’ tax within 30 days from the date of transaction, or until last March 9.
Donations made to strangers (not related by blood or affinity to donee or beneficiary) are taxed a flat rate of 30 percent. Donations made to relatives entail payment of taxes of two percent to 15 percent, depending on the amount. Donations worth P10 million are imputed a flat tax of P1.04 million, and the excess amount an additional 15 percent.
A 30-percent flat tax on the total actual spending by six presidential candidates alone from November 1, 2009 to February 8, 2010 comes up to about P300 million, or thrice as much as what Tan-Torres said the BIR has collected until last week.
TEN BIG SPENDERS
Based on published rate cards of media agencies minus 50 percent in discounts and commissions , the top six candidates for president – Liberal Party’s Senator Benigno S. Aquino III, Nacionalista Party’s Senator Manuel Villar, Pwersa ng Masang Pilipino’s Joseph Estrada, Bagumbayan Party’s Senator Richard Gordon, Lakas-CMD’s Gilberto Teodoro Jr. (defense secretary until November 15, 2009), and Bangon Pilipinas’s Eddie Villanueva – had spent a total of P1.178 billion from November 1, 2009 to February 8, 2010.
Meanwhile the top four contenders for vice president -- LP’s Senator Manuel Roxas III, NP’s Senator Loren Legarda, PMP’s Makati Mayor Jejomar Binay, and Bagumbayan’s Bayani Fernando (Metro Manila Development Authority chief until late October) -- had spent a total of P294.41 million (again based on the published rate cards minus discounts and commissions) during the same period.
Of the 10 candidates who were the biggest spenders on pre-campaign political ads, five are senators (Aquino, Villar, Gordon, Roxas, Legarda), one a mayor (Binay), and two others, recently resigned executive officials (Teodoro and Fernando).
Another senator and presidential hopeful, Ma. Consuelo ‘Jamby’ Madrigal, had yet to air a political ad up to the end of the first month of the campaign.
Those among these candidates who are still public officials should not have received donations in cash or kind from any parties for political ads that focus primarily on their common pecuniary interest: To get elected to high office. Up until their respective resignations, this also applied to Teodoro and Fernando.
PAID FOR BY FRIENDS?
Taped copies of these candidates’ political ads that aired on national television before February 9 invariably carried the salutary notice, "paid for by friends of…."
Except for Villar, who has repeatedly said that he is spending his own money on political ads and has a declared net worth of P1.04 billion in 2008, there is hardly proof in their latest statements of assets, liabilities, and net worth (SALNs) that the nine other candidates could similarly draw from a deep well of personal funds to pay for their pre-campaign ads.
R.A. No. 6713 or the Code of Ethical Conduct for Public Officials and Employees prohibits the solicitation or acceptance, directly or indirectly, of any gift, gratuity, favor, entertainment, loan or anything of monetary value from any person in the course of their official duties, or in connection with any operation being regulated by, or any transaction which may be affected by the functions of their office.
Accepting such gifts or donations makes them liable for graft and conflict of interest, an offense punishable, including expulsion from public office, under election laws.
Unlike Villar, Teodoro – who began airing ads before his resignation as defense secretary -- and the rest of the candidates from the Senate are much less affluent. Separately, their claimed net worth in their latest Statements of Assets, Liabilities, and Net Worth are much smaller in value than the tons of money that they had splurged on political ads from November 2009 to February 8, 2010, according to the Nielsen Media database that PCIJ has analyzed.
For sure, election laws are largely silent on the limits and reporting requirements for pre-campaign expenses. The situation turned murkier when, in November 2009, the Supreme Court practically lifted the ban on pre-campaign activities
Section 15 of Republic Act No. 8436, as amended by Section 13 of R.A. No. 9369, provides that "any person who files his certificate of candidacy within the period for filing shall only be considered as a candidate at the start of the campaign period for which he filed his certificate of candidacy."
The third paragraph of the same provision states that "unlawful acts or omissions applicable to a candidate shall take effect only upon the start of the aforesaid campaign period."
NO CAMPAIGN, NO BET
It was this provision that the Supreme Court cited in its ruling last November that saw it reversing itself and saying that election offenses can be committed by a candidate "only" upon the start of the campaign period.
In the high tribunal’s own words: "Indeed, there is no ‘election campaign’ or ‘partisan political activity’ designed to promote the election or defeat of a particular candidate or candidates to public office simply because there is no ‘candidate’ to speak of prior to the start of the campaign period."
As a result, all unlawful acts and omissions applicable to a candidate were deemed to take effect only beginning February 9, and all prior partisan and campaign activities, beyond the purview of election laws.
Still and all, the high court’s decision did not suspend any other laws of the republic, notably those on the ethical conduct of public officials, and those on taxation, according to scholars from the University of the Philippines College of Law consulted by the PCIJ.
UP Law professor Solomon Lumba, a bar topnotcher, says the court’s decision affirmed as well that:
Incumbent public officials who filed certificates of candidacy are still considered public officials since he/she shall be deemed resigned only upon the start of the campaign period.
In this instance, all laws regarding conduct and discipline of public officers especially Republic Act No. 3019, Republic Act No. 6713, and Presidential Decree No. 46 still apply to all incumbent public officials who are also candidates.
The contributions made by private citizens and public and private institutions not prohibited by law to persons who have filed their certificates of candidacy cannot be governed by the election laws – and may not be exempted from taxes – since the latter is still not considered a candidate until the campaign period starts.
THIRTY-PERCENT TAX
By all indications, even in the BIR’s opinion, the candidates and their donors are not entirely without liability for spending oodles of money on pre-campaign ads.
BIR legal department head Maperoma Cantillep says that as a matter of law, even relatives by blood or affinity, within the fourth degree, who had donated to the candidates, have to pay tax. If they donate more than P100,000, fixed tax rates from two to 15 percent kick in.
Under this schedule defined in the Tax Code’s Sections 98 and 99, donations worth P10 million carry a flat tax of P1.04 million, and the excess, up to 15-percent tax.
Cantillap says that those who had donated more than P10 million to candidates who are "strangers" or not their relatives by blood of affinity, should have paid taxes equivalent to 30 percent of their total donations.
"Up-front buo na kaagad percentage tax n’yan," she says. "That should be 30 percent of the donation." Link: http://www.malaya.com.ph/03232010/news4.html
No comments:
Post a Comment