Wednesday, November 18, 2009

Congresswoman or VP Arroyo?


In the light of the much talked about rumor of President Arroyo planning to run for a seat in the House of Representatives, someone asked me why we in the Constitutional Commission did not include in the Constitution a prohibition imposed on a sitting President not to run for a lower office. The only answer I could give was that no one of the Commissioners (not me, anyway) thought that a sitting President might be so humble as to seek a lower position.

And since there is no such prohibition, may she run for a seat in the House? For that mater, may she run for Vice-President, as some are suggesting now?

My position on constitutional matters is that what is not prohibited, whether expressly or implicitly, is allowed. The only constitutional prohibition I know on one who has been once elected President is that he or she may never run for election to the same office a second time. And since the right to aspire for office is itself an important constitutional right, any restriction on the right must be interpreted strictly and narrowly. The prohibition is only against running for the presidency a second time. Hence, GMA may not run for President again (unless the Constitution is amended to allow her or others in her position to do so), but she can even run for Barangay Tanod, should humility drive her to do so. It is for the electorate to decide whether to allow her to so abase herself.

Premature Election Campaign

Still simmering is the controversy over premature campaigning. The confusion arises from Sections 68, 79{a) and 80 of the Omnibus Election Code. Section 80 says: “It shall be unlawful for any person, whether or not a voter or candidate, or for any party, or association of persons, to engage in an election campaign or partisan political activity except during the campaign period . . .” And according to Section 68 any candidate who is found by the Commission on Election to have violated the provision “shall be disqualified from continuing as a candidate, or if he has been elected, from holding the office.” Moreover, a candidate is defined by Section 79(a) as “any person aspiring for or seeking an elective public office, who has filed a certificate of candidacy by himself or through an accredited political party, aggroupment, or coalition of parties.”

From the above it can be seen that to commit an act that will subject a person to disqualification, that person must be a candidate, that is, one “who has filed a certificate of candidacy.” Thus, if a private person campaigns outside the campaign period but does not become a candidate, he has done nothing wrong. But if later he files his certificate of candidacy, the earlier act of the private person becomes, according to the Court, the act of the private person-turned candidate.

This is how eight Justices (with seven dissenting) have read the law. But this seems to me like ex post facto hocus pocus -- a person is penalized for having exercised freedom of expression!

5% “Campaign Contribution Tax”

I have enclosed “campaign contribution tax” in quotation marks because I am trying to figure out what the real nature of the tax is.

The first point to remember is that, except for the power to impose “tariff rate, import and export quotas, tonnage and wharfage dues and other imposts or duties” which Congress migh give to the President, taxes of any kind come from Congress. Is what is being called a campaign contribution tax something that has come from Congress or is it an illicit imposition being made by the BIR?

The way I understand the BIR’s explanation is that it is an application of an old withholding tax provision in the Internal Revenue Code which says “The Secretary of Finance may, upon the recommendation of the Commissioner, require the withholding of a tax on the items of income payable to natural or juridical persons, residing in the Philippines, by payor-corporation/persons as provided for by law, at the rate of not less than one percent (1%) but not more than thirty-two percent (32%) thereof, which shall be credited against the income tax liability of the taxpayer for the taxable year.”

Seen this way, it is not the politician or a political party that pays the tax but the person who is the politician’s or party’s source of contribution. Admittedly, however, the politician or the party will receive 5% less to spend!

True it is that the withholding tax provision has been there all along. But, to the best of my knowledge, it is only now that it is being applied to election campaign context. And since this imposition is being done for the first time as we approach what is developing to be a fascinating election, one naturally wonders what gave birth to this bright idea. We shall be hearing more about this.

Incidentally the same Internal Revenue Code, in the Section on Rates of Tax Payable by Donor, says that “Any contribution in cash or in kind to any candidate, political party or coalition of parties for campaign purposes shall be governed by the Election Code, as amended.” Does this have any relevance to donations specifically made for election campaign?

9 November 2009

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