Pia questions constitutionality of 5% poll tax

Senator Pia S. Cayetano today called on the Bureau of Internal Revenue (BIR) to defer its order to impose a five percent tax on political campaign contributions, a move which she branded as "unconstitutional" and an "unjust exaction on the legitimate exercise of democracy."

"The Constitution (Sec.24, Art. VI) mandates that all tax measures shall originate exclusively from the House of Representatives, to which the Senate can concur or propose amendments. Without a clear-cut law approved by Congress, where did the BIR base its new poll tax?" asked Cayetano, Chairperson of the Senate Committee on Social Justice. Moreover, she noted that under RA 7166 (An Act providing for synchronized national and local elections and for electoral reforms), electoral contributions are not subject to the payment of any gift tax.

"The BIR rules effectively amend RA 7166. That is illegal. Rules of an agency cannot, in any way, expand or amend the law or the Constitution," explained Cayetano, who is a lawyer. BIR Revenue Regulation 8-09 requires all political candidates, parties and their donors to remit a 5-percent withholding tax on their campaign expenditures and contributions. It also mandates them to register with the bureau as withholding agents.

"The BIR is obviously rushing this to plug the budget gap," she added, noting that the national government's deficit had already hit P237.5 billion as of end-September, or only P12.5 billion short of the deficit target of P250 billion for the full year.

"It's unfortunate that the government is now bent on taxing the legitimate exercise of democracy to make up for its own inefficiency in collecting taxes. Why don't they go after illegal activities like big-time smuggling, tax evasion and businesses notorious for understating their sales and profits?"

Cayetano vowed to join efforts in the Senate to look into the new poll tax when session resumes next week.