House panel OKs tax-free contributions to political parties

A committee of the House of Representatives has approved a measure that will exempt donors from tax payments on contributions they give to candidates – as long as these are reported to the Commission on Elections (Comelec).

Nueva Ecija Rep. Estrellita Suansing’s ways and means committee approved the tax provisions of a substitute bill authored by Speaker Gloria Macapagal-Arroyo, among others, that seeks to strengthen the political party system.

The substitute bill is a consolidation of House Bills 697 (Political Party Development Act) of Arroyo, 522 of Majority Leader Fredenil Castro, 1695 of Reps. Maximo Rodriguez Jr. (Cagayan de Oro) and 7088 of Gary Alejano (Magdalo party-list).

Suansing’s panel approved Section 11 of the substitute measure, which provides that voluntary contributions to any political party shall be subject to limitations and conditions – like a P1-million cap for an individual and P10 million from a company.

Any contribution in cash or in kind to any political party for campaign purposes, reported to the Comelec in accordance with Section 13 of the Synchronized National and Local Elections law (Republic Act 7166), shall be exempt from the donor’s tax.

But no foreign national or entity shall be allowed to give contributions to any political party.

The bill provides that voluntary contributions to a political party shall be deposited by the contributor to the account of the party with any reputable bank accredited by the Comelec at any time but not later than 15 days before the day of the election.

The accredited banks shall issue a corresponding receipt to the contributor on the amount deposited and shall submit to the Comelec a statement of account of every political party with bank deposits.

The Comelec, in turn, shall cause the publication of the bank accounts of all political parties in any newspaper of general circulation, within a reasonable time as determined by the Comelec.

The measure aims to institutionalize reforms in the financing of electoral campaigns to promote accountability and transparency as well as to provide financial subsidies to political parties, to augment their expenditures for campaign purposes and for party development.