BIR plans to tax online sellers; solons command bureau to get unpaid POGO taxes instead

By Taj Lagulao

As e-commerce becomes more popular in the pandemic, the Bureau of Internal Revenue (BIR) issued a memorandum directing online sellers and businesses to declare previous transactions, register their activities, and settle taxes before July 31.

The Memorandum Circular 60-2020 was issued to give notice to people who are using digital means of selling products to register their businesses on BIR. 

The circular specified that it will also cover payment getaways, delivery channels, internet service providers, and other facilitators.

Additionally, the circular noted that those who registered their business activities and paid their taxes not later than July 31 would not be penalized.

“All those who will be found later doing business without complying with the registration or update requirements, and those who failed to declare past due taxes or unpaid taxes shall be imposed with the applicable penalties under the law, and existing revenue rules and regulations,” BIR said.

‘Filipino first’

Several politicians have questioned the decision of BIR to continue with the memo while the country faces an economic crisis and people are struggling to get by.

Sen. Joel Villanueva disagreed with taxing online sellers while they were trying to survive the pandemic.

“In ordinary times, yes online sellers should register and pay the appropriate taxes. But right now, we have a pandemic and everyone is just trying to survive. We should encourage these online sellers so they can thrive and contribute to economic activities,” the senator said.

Instead, he said that the government should instead provide assistance to these online sellers.

“What the government must do is to provide enough online resources so that they can upgrade their entrepreneurial skills and be knowledgeable in proper handling and storage of food, and financial management, among others, to make their businesses sustainable,” he explained. 

On Thursday, the senator said that the government should shift its focus towards the big-time tax evaders like the Philippine Offshore Gaming Operators (POGOs).

“We know the government needs to collect taxes. It must first go after those with proven tax liabilities. Up to now, Pogos have yet to pay the P50 billion they owe. They should be the focus of the BIR,” he said. 

Sen. Risa Hontiveros also said that the focus should be on the unpaid taxes of the POGOs, not on the Filipinos that were already struggling to make money.

“Imbes na online sellers, baka pwedeng singilin muna ang mga POGO na may 50 billion pesos in unpaid taxes? Hindi yung dagdag-perwisyo pa sa sarili nating mga kababayan na kaunti na nga lang ang kita para pandagdag-gastos sa pamilya nila,” she said. “Pwede bang kapakanan ng mga Pinoy muna?”

She questioned the difference between the treatment for POGOs and the Filipinos, pointing out that POGOs were still allowed to operate during the quarantine even though they weren’t essential businesses and that they were already receiving mass testing while the Filipinos weren’t.

Meanwhile, Sen. Sonny Angara pointed out that the timing of the taxes wasn’t the best, given that Filipinos are currently facing a crisis.

‘’But these are not new taxes, but just collection of taxes due under existing laws. So if you ask a seller who has a store, he will say it’s only fair to have a level playing field since that seller pays the transaction taxes due,’’ he said.

Sen. Sherwin Gatchalian echoed the sentiment, pointing out that BIR was being insensitive to the online sellers who were only now coming back after the job losses in the quarantine

“Importante ang tamang timing sa pagtatakda o pagtataas ng buwis. Hindi tama ang timing ng BIR na patawan ng tax ang mga online sellers na karamihan sa kanila ay nagsisimula pa lang makabangon muli dahil nawalan ng trabaho nuong kasagsagan ng Enhanced Community Quarantine (ECQ),” Gatchalian declared.

He then added that since a vaccine still hasn’t been discovered, everyone should be encouraged to shift over to the digital economy.

“Before we impose new taxes on the digital economy, we should first think of ways on how we are going to develop this industry in order to provide more jobs and opportunities to all Filipinos. I believe premature taxation will only do harm than good to our growing digital economy,” he said. [P]

Photo by BusinessWorld