House panel OKs tax-free contributions to political parties

MANILA, Philippines — The House of Representatives ways and means panel approved on Monday a provision of the proposed “Political Party Development Act” that seeks to exempt from the donor’s tax all campaign contributions to political parties.

The committee unanimously approved Section 11 of the still unnumbered substitute bill to House Bill Nos. 522, 697, 1695, and 7088 which seeks to exempt from the donor’s tax all campaign contributions duly reported to the Commission on Elections in accordance with Section 13 of Republic Act No. 7166 or the “Synchronized National and Local Elections Act.”

The provision also proposes a P1 million maximum campaign contribution from a natural person and a P10 million maximum contribution from a juridical person.

Contributions from foreign individuals and entities are prohibited.

On Oct. 10, 2018, the committee on suffrage and electoral reforms approved the other provisions of the proposed law.

Aside from imposing penalties on political turncoats, the bill also seeks to create the State Subsidy Fund (SSF) which would be used directly and exclusively for party development and campaign expenditures of accredited national political parties and would be included in the annual General Appropriations Act.

The bill specifically provides that the SSF be distributed as follows:

1) 5 percent shall be used exclusively for monitoring purposes and the conduct of information dissemination campaigns and voter’s education;

2) 30 percent shall be proportionately and ratably distributed to accredited political parties represented in the Senate based on the number of seats obtained in the most recent general elections; and

3) 65 percent shall be proportionately and distributed to accredited political parties in the House of Representatives based on the number of seats obtained in the most recent general elections.

In general, the measure seeks to “institutionalize reforms in the financing of electoral campaigns, so as to promote accountability and transparency” and to “provide subsidies to political parties” by “augmenting their expenditures for campaign purposes and for party development.” /gsg