IT is reassuring to hear that the Bureau of Internal Revenue (BIR) will start tweaking their usual policy on taxing businesses by including in the tax base the sectors that otherwise had remained untouched. We refer to the digital platforms and e-marketplace platforms that have sprouted like mushrooms since the COVID-19 years and have remained as robust market players especially in the retail sector to this day.
Numbers show that 62.5 percent of Filipinos have purchased a product or a service online. These buyers are mostly young consumers, thus boosting the e-commerce potential of the country. It was estimated that by 2025, e-commerce will triple in the Philippines.
The BIR’s announcement that it will strictly monitor digital platforms as well as lessors of commercial spaces to ensure tax compliance of their online sellers, content creators, or tenants is therefore considered timely.
`We hope this new policy will level the playing field between physical stores and online stores by regulating them equally, and taxing them uniformly.’
“We will be monitoring digital platforms and e-marketplace platforms like Lazada, Shopee and TikTok to check if their online sellers and content creators are compliant with BIR registration,” BIR commissioner Romeo Lumagui Jr. said in a statement.
Lumagui added that they will also monitor lessors and sub-lessors of commercial spaces like malls and buildings to check if their tenants are compliant. Allowing lessees or online sellers/merchants to engage in business on the premises or digital platform without BIR registration will be considered a violation of tax laws, he pointed out.
The BIR recently issued Revenue Regulations No. 15-2024 (RR No. 15-2024) that prescribes the policies in relation to the registration of brick-and-mortar stores and online businesses. This directive provides that lessors, sub-lessors of commercial establishments/buildings/space and operators of digital platforms, including e-marketplace platforms, are required to ensure that all their lessees and online sellers or merchants are duly registered with the BIR.
We appreciate the BIR’s move on this regard, because the government has been strict in collecting income taxes, real property tax, business taxes and permits from ordinary workers and employees, home owners, businessmen and corporations but it has been remiss in collecting taxes from incomes derived by business entities operating online.
The tax collection office has started to show its teeth, saying that new regulation also provides that business operations may be suspended through the issuance of a closure/take down order against physical or online businesses. The closure of such business operations does not preclude the BIR from filing tax evasion cases under its Run After Tax Evaders program.
“We advise that e-marketplace platforms, online sellers and content creators should strictly follow RR No. 15-2024 as soon as possible. It is unfair to the retail industry or to sectors with brick-and-mortar stores, if online businesses are not regulated and taxed in the same manner. If physical stores can be closed down through a closure order, online businesses can be closed down through a takedown order,” the BIR chief said.
It was also announced that failure to enact or strictly enforce internal mechanisms or rules to prohibit the non-registration of these lessees or online sellers shall be considered by the BIR as an act of aiding or abetting in the commission of the offense.
We hope this new policy will level the playing field between physical stores and online stores by regulating them equally, and taxing them uniformly.
