online selling – Page 2 – Author Carlo Carrasco

BIR extends deadline for online businesses to transition to new withholding tax system to July 14, 2024

April 29, 2024April 16, 2024carlocarrasco

Recently the Bureau of Internal Revenue (BIR) announced that July 14, 2024, is the new deadline for online businesses to transition to the new withholding tax system, according to a GMA Network news report. Previously the deadline was April 15, 2024 and online businesses with annual earnings of over P500,000 were to be covered by the 1% withholding tax.

To put things in perspective, posted below is an excerpt from the GMA news article. Some parts in boldface…

The Bureau of Internal Revenue (BIR) announced Tuesday that it has extended the deadline for online merchants to transition to the new withholding tax system by 90 days.

According to the agency, Revenue Memorandum Circular No. 55-2024 extended the transitory period for compliance with Revenue Regulations (RR) No. 16-2023 until July 14 after considering the private sector’s request on the implementation.

“This 90-day extension of the transitory period under RR No. 16-2023 shows the BIR’s commitment in listening to the voice of the private sector,” BIR Commissioner Jun Lumagui said in a statement.

“This is part of my administration’s thrust on Excellent Taxpayer Service. We hear the thoughts of the private sector, and if the same is reasonable, then we make policy adjustments for the benefit of the Filipino people,” added Lumagui.

Under RR No. 16-2023, one-half of the gross remittances of e-marketplace operations and digital financial services providers to the sellers or merchants for goods or services paid through their platform shall be subject to a 1% creditable withholding tax.

The BIR said that the online transactions industry has experienced growth during and after the coronavirus pandemic but it appeared that many online sellers were not paying their share in taxes.

RR No. 16-2023 was signed by Lumagui and Finance Secretary Benjamin Diokno in December 2023.

Let me end this piece by asking you readers: What is your reaction to this recent development? Do you think that the new deadline will give all online businesses here in the Philippines enough time to transition into the new withholding tax system?

You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.

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Thank you for reading. If you find this article engaging, please click the like button below, share this article to others and also please consider making a donation to support my publishing. If you are looking for a copywriter to create content for your special project or business, check out my services and my portfolio. Feel free to contact me with a private message. Also please feel free to visit my Facebook page Author Carlo Carrasco and follow me on Twitter at @HavenorFantasy as well as on Tumblr at https://carlocarrasco.tumblr.com/ and on Instagram athttps://www.instagram.com/authorcarlocarrasco

Philippines described by Nikkei Asia as “Asia’s epicenter for online shopping scams”

March 7, 2024February 27, 2024carlocarrasco

In recent times, a lot of people here in the Philippines got cheated by a scammer over their huge purchases of tickets for a Taylor Swift in Singapore. This incident serves as a painful reminder that the nation has been hit by a lot of scams online, so much so the Nikkei Asia published a December 2023 article describing the Philippines as “Asia’s epicenter for online shopping scams.”

To put things in perspective, posted below is an excerpt from the Nikkei Asia article. Some parts in boldface…

James Relativo thought he had landed a great deal on an electric drum set, but instead the Manila resident was cheated out of his money in a country gaining the dubious distinction as Asia’s worst for online sales scams.

Shoppers across the Philippines have been bilked out of millions of dollars so far this year, with some turning to victim chat groups on Facebook and other social media. A recent report found more than one-third of Filipinos surveyed had been scammed or encountered retail fraud online.

“Some people easily believe in false promises even if they are too good to be true,” warned Alexander Ramos, executive director of the Cybercrime Investigation and Coordinating Center (CICC).

In retrospect, Relativo might have been more skeptical about a drum set going for 8,000 pesos ($140), less than half the usual price, on e-commerce site Shopee.

But he hit ‘buy’ without hesitating, and soon things turned suspicious. The seller shifted its communications to a messaging app and demanded half the cost of the drums for “refundable taxes.”

More money demands followed until a frustrated Relativo agreed to bypass Shopee’s payment system and settle his remaining balance on GCash, a digital payments platform. He never got his drums.

“I just kept telling him I wanted my money back,” Relativo told Nikkei Asia, his voice laced with exasperation. “It wasn’t like I was dealing with a scammer — he was talking to me, sending me pictures of the drum set being packed.“

The journalist’s saga highlights a bitter experience for a growing number of people in the Philippines, which clocked the highest scam rate for online shoppers across nearly a dozen economies in the 2023 Asia Scam Report, published in November.

Commissioned by the Global Anti-Scam Alliance (GASA) and Taiwan-based tech security company Gogolook, the report surveyed 20,000 respondents about their online shopping experiences in Vietnam, China, Thailand, Hong Kong, Taiwan, Indonesia, South Korea, Japan, Malaysia, Singapore and the Philippines.

The shopping scam rate in the Philippines led the group at an eye-watering 35.9%, followed by mainland China at 27.2%. South Korea had the lowest incidence, at 4.2%.

The explosion in online shopping has created a lucrative market for scammers. And a lack of cybercrime awareness is aggravating the problem in the Philippines, where people spend an average of 10 hours a day online by some estimates.

“Although (Filipinos) are considered very connected and digitally wired, (they) do not have adequate digital literacy skills,” said Mark Manantan, director of cybersecurity and critical technologies at the Pacific Forum in Hawaii.

The survey found that Filipinos were easy prey for scammers because they “respond too quickly” to sellers’ demands.

Let me end this piece by asking you readers: What is your reaction about this recent development? Do you think Nikkei Asia’s article is detailed enough and trustworthy when it comes to gaining a strong awareness about online scams? How members of your household or your local community got scammed online over the past six months? Why do you think a lot of people in the Philippines are so determined to spend a lot of money to watch a Taylor Swift event overseas?

You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.

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DTI intensifies scrutiny of online sellers who engaged with offering mystery boxes to customers

February 16, 2024February 8, 2024carlocarrasco

If you are fond of ordering items online, better stay away from those mystery boxes offered to you because the Department of Trade and Industry (DTI) is closely watching online sellers offering those things, according to a Philippine News Agency (PNA) news report.

To put things in perspective, posted below is an excerpt from the PNA article. Some parts in boldface…

The Department of Trade and Industry (DTI) has intensified its scrutiny of online sellers, particularly those offering mystery boxes or parcels, to ensure consumer protection and uphold fair trade practices.

In an interview with Bagong Pilipinas Ngayon Wednesday, DTI Assistant Secretary Amanda Nograles said all online shops selling mystery items are subject to stringent verification procedures requiring them to provide evidence regarding the sourcing of the items they offer on their platforms.

Nograles said sellers must substantiate the items’ origin, demonstrating that they have acquired them through legal means. This could include proof of purchase from valid auctions or confirmation that the items were legally obtained from sources such as the Bureau of Customs (BOC) or through legitimate means like through abandoned parcels or “balikbayan” boxes.

“Kailangan iyong online seller ay makapagbigay ng ganoong ebidensiya; ngayon kung hindi, puwede natin siyang ipa-takedown doon sa platform – we have a good relationship with most online shopping platforms and kapag ni-request po ng DTI, napapakiusapan po natin na tini-takedown iyong mga seller na ganito at nang hindi po makabiktima ng mga consumers natin (The online seller needs to provide such evidence; now if not, we can have them taken down from the platform – we have a good relationship with most online shopping platforms, and when requested by the DTI, we ask them to have such sellers taken down so that they cannot victimize consumers),” she said.

Nograles said the DTI is regularly monitoring online stores.

Some items inside mystery boxes or parcels are illegally sourced, such as stolen products from warehouses, which is against the Anti-Fencing Law, the DTI official said.

The Anti-Fencing Law prohibits the selling of stolen goods or items obtained through illicit means. Both sellers and buyers can be charged if these items were stolen.

The DTI’s move to tighten regulations on online sellers aims to safeguard consumers from potentially fraudulent or unsafe products while also promoting transparency and accountability within the e-commerce sector, Nograles said.

Let me end this piece by asking you readers: What is your reaction to this recent report? Are you concerned that mystery boxes are harmful to consumers who are often looking for the best deals online? Do you think that items placed inside mystery boxes may have been stolen or smuggled? How many times have you availed of mystery boxes offers online?

You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.

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BIR clarifies that small online sellers are exempted from 1% withholding tax

February 6, 2024January 30, 2024carlocarrasco

In response to growing concerns related to the recent implementation of the 1% withholding tax on online merchants with annual earnings of over P500,000, the Bureau of Internal Revenue (BIR) clarified that small online sellers are exempted from it, according to a BusinessWorld news report.

To put things in perspective, posted below is an excerpt from the BusinessWorld news report. Some parts in boldface…

THE BUREAU of Internal Revenue (BIR) on Monday clarified that small online sellers are exempted from the payment of the creditable withholding tax imposed on online marketplaces but would still need to register their business.

“Small-scale online sellers are exempted from withholding tax. The BIR is sympathetic to small businesses in its approach to taxing online sellers/merchants,” BIR Commissioner Romeo D. Lumagui, Jr. said in a statement.

BIR Revenue Regulations No. 16-2023, which took effect on Jan. 11, imposes a withholding tax of 1% on one-half of the gross remittances by e-marketplace operators and digital financial service providers to the sellers or mer-chants for the goods and services paid or sold through their platforms or facilities.

The BIR said that the withholding tax is not imposed if the annual total gross remittances to an online seller for the past taxable year has not exceeded P500,000; if the cumulative gross remittances to an online seller in a taxable year has not yet exceeded P500,000 or if the seller is duly exempt from or subject to a lower income tax rate pursuant to any existing law or treaty.

“For those who are above the threshold of P500,000 annual gross remittance, it is only fair that they will be subjected to withholding tax. We have to be fair to the retail sector and brick and mortar stores who are regularly pay-ing their taxes,” Mr. Lumagui said.

The tax covers marketplaces for online shopping, food delivery platforms, platforms to book lodging accommodations, and other similar online service or product marketplaces.

E-marketplace operators and digital financial service providers were given a 90-day transitory period to comply with the order.

The BIR in a separate circular said all online sellers and merchants need to register with the BIR and submit documentary requirements, even if their annual gross remittance is below the P500,000 threshold.

The circular also noted that sellers and merchants are not allowed to receive payments through a personal account and instead must use a BIR-registered account.

“If you have a business, you have to register and pay your taxes. It doesn’t matter if it’s an actual store or an online store. It is your responsibility to pay taxes like everyone else,” Mr. Lumagui said.

In a press conference last week, Mr. Lumagui told reporters that the measure will help the BIR better gauge the impact of the digital economy.

“We gave the online platforms a grace period of 90 days. With that, we are still checking on which are already capable of complying… During our discussions with online platforms, they’re cooperative. With this development, we’re hoping to get the entire picture on online transactions,” he said.

In 2022, the digital economy contributed P2.08 trillion or equivalent to 9.4% of the gross domestic product.

A report by Google, Temasek Holdings and Bain & Company showed that the Philippines’ digital economy is projected to reach as high as $150 billion by 2030.

The BIR also earlier clarified that the withholding tax is not a “new” tax as it is just a measure that will allow for an advance payment of income tax.

Let me end this piece by asking you readers: What is your reaction to this recent development? Do you think the newest clarification made by the BIR will end the confusion or concerns regarding the 1% withholding tax? If you are aspiring to sell items online, does the 1% withholding tax discourage you?

You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.

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Withholding tax on online sellers could address revenue leakages

January 18, 2024January 12, 2024carlocarrasco

With the 1% withholding tax on online sellers already in effect, there is potential that the said tax could address revenue leakages, according to a BusinessWorld news article.

To put things in perspective, posted below is an excerpt from the BusinessWorld news article. Some parts in boldface…

THE GOVERNMENT should ensure that it will be able to properly implement and monitor the collection of withholding tax on online sellers.

The Bureau of Internal Revenue (BIR) recently issued Revenue Regulations (RR) No. 16, which imposes a withholding tax on the gross remittances made by electronic marketplace operators and digital financial service providers to merchants.

Analysts said that the implementation of the withholding tax on online sellers will allow the BIR to better track transactions in the digital economy.

“The implementation of a 1% withholding tax on online sellers is intended to expand the tax base by addressing potential revenue leakages in the growing online retail industry,” China Banking Corp. Chief Economist Domini S. Velasquez said in a Viber message.

“Ideally, the withholding tax system should streamline the tax payment process for online sellers and should have no substantial impact on prices under the assumption that retailers are paying correct taxes,” she added.

Eleanor L. Roque, tax principal of P&A Grant Thornton, said that the measure provides the BIR an additional mechanism to “ensure that taxes are paid by the business owners since their income will also be reported by their withholding agents.”

Ms. Velasquez noted that the imposition of the withholding tax may also mitigate some instances of noncompliance by online sellers.

“This measure is expected to increase government revenues and promote transparency among companies engaged in online retail trade,” she added.

Ms. Roque said that the tax will be an “additional administrative burden” on electronic marketplaces.

“These entities will have to put controls in place to identify remittances to online sellers that are subject to withholding taxes,” she said in a Viber message.

Under BIR regulation, a withholding tax of 1% will be imposed on one-half of the gross remittances by e-marketplace operators and digital financial service providers to the sellers or merchants for the goods and services paid or sold through their platforms or facilities.

However, the tax is not imposed if the annual total gross remittances to an online seller for the past taxable year has not exceeded P500,000; if the cumulative gross remittances to an online seller in a taxable year has not yet exceeded P500,000 or if the seller is duly exempt from or subject to a lower income tax rate pursuant to any existing law or treaty.

The regulation covers marketplaces for online shopping, food delivery platforms, platforms to book lodging accommodations, and other similar online service or product marketplaces.

Let me end this piece by asking you readers: What is your reaction to this recent development? Do you think the withholding tax on online sellers will solve government revenue leakages?

You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.

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BIR imposes 1% withholding tax on online merchants with annual earnings of over P500,000

January 3, 2024December 30, 2023carlocarrasco

Those who engage with selling online here in the Philippines and earn over P500,000 annually will have a new normal to live with as the Bureau of Internal Revenue (BIR) officially imposed the 1% withholding tax on online merchants that are found qualified, according to a Philippine News Agency (PNA) news article. Take note that BIR had been targeting online sellers previously and the Department of Finance (DOF) asserted that online sellers should be subject to the same tax obligations as traditional brick-and-mortar business owners for the sake of fairness.

In the year 2022, the digital economy of the Philippines contributed P2.08 trillion, equivalent to 9.4% of gross domestic product. Of this, e-commerce had the highest growth at 26.5%, with its share to the economy reaching 20% or P416.12 billion.

To put things in perspective, posted below is an excerpt from the PNA news article. Some parts in boldface…

The Bureau of Internal Revenue (BIR) has announced that online merchants with earnings amounting to more than PHP500,000 annually are now subject to a 1-percent withholding tax.

BIR Revenue Regulation 16-2023, issued last December 21, said the withholding tax will apply to one-half of the gross remittances by electronic marketplace operators and digital financial services providers to the sellers or merchants for the goods or services sold through their platform.

The BIR defines an electronic marketplace as a “digital service platform whose business is to connect online buyers/consumers with online sellers/merchants, facilitate and conclude the sales, process the payment of the products, goods or services through such digital platform, or facilitate the shipment of goods or provide logistic services and post-purchase support within such platforms.”

These include marketplaces for online shopping, food delivery platform, and platform for accommodation booking.

The BIR clarified, however, that the withholding tax will not be imposed if the annual total gross remittances to an online seller do not exceed PHP500,000.

The withholding tax shall not apply “if the cumulative gross remittances to an online seller/merchant in a taxable year has not yet exceeded PHP500,000,” the BIR said.

Sellers subject to a lower income tax rate pursuant to any existing law are also excluded.

Let me end this piece by asking you readers: What is your reaction to this recent development? Do you think the BIR made the right move? Do you think the imposition of the 1% withholding tax on online sellers (that made over P500,000 annually) will have a significant impact on e-commerce here in the Philippines? If you were planning to sell goods or services online, does the 1% withholding tax discourage you?

You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.

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Thank you for reading. If you find this article engaging, please click the like button below, share this article to others and also please consider making a donation to support my publishing. If you are looking for a copywriter to create content for your special project or business, check out my services and my portfolio. Feel free to contact me with a private message. Also please feel free to visit my Facebook page Author Carlo Carrasco and follow me on Twitter at @HavenorFantasy as well as on Tumblr at https://carlocarrasco.tumblr.com/and on Instagram athttps://www.instagram.com/authorcarlocarrasco

People who sold firecrackers online arrested by PNP

January 2, 2024December 28, 2023carlocarrasco

During the past Christmas season, varied elements of the Philippine National Police (PNP) staged different operations that resulted in the arrests of people who engaged in the online selling of firecrackers, according to a Philippine News Agency (PNA) news article.

To put things in perspective, posted below is an excerpt from the PNA news article. Some parts in boldface…

The Philippine National Police (PNP) has arrested five online firecracker sellers since Dec. 19 in separate entrapment operations, a police official said on Thursday.

In a statement, Col. Jay Guillermo, chief of the PNP-Anti-Cybercrime Group’s (ACG) Cyber Response Unit, said the entrapment operation stemmed from the directive of the PNP leadership to intensify its drive against the illegal manufacture and sale of firecrackers and pyrotechnic materials.

“My personal take on this is that these can be used by criminals. They can buy firecrackers with a huge amount of gunpowder and if you combine them all, they can turn into explosives. There is a need to regulate the sale of these firecrackers so that we can monitor who buys them,” he said.

Guillermo said ACG operatives contacted online sellers for the purchase of firecrackers during the conduct of regular cyber patrol.

He identified the suspects as Jaymar Sandoval, 22, and Eugene Macasaet, 23, who were arrested in an entrapment operation at Barangay San Ramon in Dinalupihan, Bataan on Thursday morning.

Seized during the operation were two bundles of kwitis (rocket), one sawa 1,800 rounds firecracker, one box piccolo firecracker, and three bundles of five colors with the total amount of PHP5,300

At around 6 p.m. on Wednesday, Victoria So, a female seller, met with the ACG undercover agent that resulted in her arrest in her house in Tondo, Manila.

Seized during the operation were a cellular phone, the marked money and 10 rims of prohibited firecrackers.

Two persons were recently arrested by ACG operatives in Caloocan City for selling firecrackers online.

Sabino Medenilla, 19, was arrested on Dec. 19, and Rodel Constantino, 39, was collared on Dec. 21. The suspects negotiated with ACG operatives posing as buyers of firecrackers.

Guillermo said the arrested suspects will be charged with violation of Republic Act No. 7183, or the “Act Regulating the Sale, Manufacture, Distribution, and Use of Firecrackers and Pyrotechnic Devices” in relation to Cybercrime Prevention Act of 2012.

For this year, Guillermo said there were four police operations conducted that resulted in the arrest of 11 persons and seized PHP40,700 worth of firecrackers.

He discouraged the public from buying firecrackers sold online as this may endanger their lives.

Meanwhile, Interior Secretary Benjamin Abalos Jr. called on local government units (LGUs) to strictly enforce ordinances banning the use of illegal firecrackers to minimize, if not totally eliminate injuries for the New Year revelry.

Based on DILG data, Abalos said at least 1,210 LGUs already have ordinances banning the use of harmful firecrackers in their respective localities.

Let me end this piece by asking you readers: What is your reaction to this recent development? Do you think that it is indeed illegal to sell firecrackers online? Are you aware of your local government’s restrictions towards firecrackers?

You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.

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Imposition of withholding tax on online sellers could happen before December 2023

November 2, 2023October 31, 2023carlocarrasco

Those of you who have been engaging with online selling, you better brace yourselves as the Bureau of Internal Revenue (BIR) hopes to begin imposing a creditable withholding tax before December 2023, according to a BusinessWorld news report. Specifically, this move applies on partner-merchants of online platforms.

To put things in perspective, posted below is an excerpt from the BusinessWorld news article. Some parts in boldface…

THE BUREAU of Internal Revenue (BIR) is hoping to start imposing a creditable withholding tax on partner-merchants of online platforms before the start of December, an official said.

“The process could be shorter, and we might just come up with it before the start of December. It will not be unreasonable to expect it before the start of December,” BIR Assistant Commissioner Jethro M. Sabariaga told reporters on the sidelines of the SGV Tax Symposium last week.

“The longer you withhold this release, you’re hobbling a significant portion of today’s economic transactions,” he added.

The BIR last week released the final draft of the amendments to Revenue Regulation No. 2-98 which currently does not cover income payments by online platform providers.

Under the final draft, the BIR would impose a withholding tax of 1% on one half of the gross remittances by domestic e-marketplace operators to the online merchants for the goods or services sold through their facility.

However, the withholding tax will not apply if annual total gross remittances to an online merchant for the past taxable year has not exceeded P250,000, or if the cumulative gross remittances to an online merchant in a taxable year has not yet exceeded P250,000.

Also exempted are online merchants who are part of a cooperative duly registered with the BIR with a valid Certificate of Tax Exemption.

Mr. Sabariaga said the BIR took note of the suggestions and objections to the draft rules raised by affected sectors. The BIR’s deadline for comments from stakeholders on the final draft ended on Oct. 27.

“This will all be taken into consideration and then be studied and then the final draft will be released and exposed,” he said.

Since then, Mr. Sabariaga said the agency consulted with various industries to come up with the latest version of the draft.

“It’s the first exposition of the draft, you have to consider the various industries, the applicability of the withholding (tax) on the various industries, the rates, the economic provisions of it,” he added

The BIR has been seeking ways to tax the digital economy, particularly as e-commerce surged during the pandemic.

In 2022, the digital economy contributed P2.08 trillion, equivalent to 9.4% of gross domestic product. Of this, e-commerce had the highest growth at 26.5%, with its share to the economy reaching 20% or P416.12 billion.

Let me end this piece by asking you readers: What is your reaction to this recent development? If you have been regularly selling online, do you think you will be covered by the planned withholding tax by the BIR? Do you have all financial and legal records prepared?

You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.

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Department of Finance (DOF) says online sellers must pay equal taxes as physical stores

August 3, 2023August 1, 2023carlocarrasco

As far as the Department of Finance (DOF) is concerned, those who sell online must pay equal taxes as the physical stores do, according to a Manila Bulletin news report. Take note that the Philippines continues to recover from the economic downturn of COVID-19 and the coronavirus itself no longer poses a danger to the nation.

To put things in perspective, posted below is an excerpt from the Manila Bulletin news article. Some parts in boldface…

The Department of Finance (DOF) asserted that online sellers should be subject to the same tax obligations as traditional brick-and-mortar business owners for the sake of fairness.

Finance Secretary Benjamin E. Diokno said the collection of withholding tax on online sellers by the Bureau of Internal Revenue (BIR) is driven by the principle of fairness, and it does not constitute a new tax.

Withholding tax is a type of tax collected from various income sources, including salaries, wages, interest, and other earnings.

“It’s a matter of fairness because if you buy from a regular store, you have to pay taxes. But here [in online business], you don’t have to pay, and that’s unfair,” Diokno told reporters.

Diokno stressed the need for individuals to view the tax system as fair and willingly fulfill their tax obligations.

The BIR has proposed a new rule that would require online platform providers, such as Lazada and Shopee, to withhold one percent of the money they pay to their partner sellers. This withholding tax would be applied to half of the total amount being paid.

The BIR explained that this is not an additional tax, but rather a way to enforce existing tax laws and ensure proper tax collection.

“It’s not only increasing tax revenues, it’s a matter of fairness. A good tax system should be fair. That should be one of the characteristics of a good tax system, fairness,” the finance chief said.

BIR Commissioner Romeo D. Lumagui, Jr. earlier said the tax agency aims to begin collecting a creditable withholding tax from online platform partner merchants by the fourth quarter of 2023.

Lumagui also said that their objective is to fully implement this tax by next year.

He also explained that the purpose of imposing taxes on online merchants is to ensure a level playing field between traditional brick-and-mortar retailers and those selling on digital platforms or marketplaces.

Let me end this piece by asking you readers: What is your reaction to this recent development? Do you agree with the DOF on taxing online sellers? If you own a physical store selling products, does the presence of local online sellers harm your business?

You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.

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BIR targeting online sellers

March 20, 2023March 13, 2023carlocarrasco

If you have been engaging on selling items or services online, you should be aware that the Philippines’ authority on taxation the Bureau of Internal Revenue (BIR) is constantly watching you and it is seeking ways to tax you, according to a BusinessWorld news report. Already the BIR has been communicating with the e-commerce platforms.

To put things in perspective, posted below is an excerpt from the BusinessWorld news article. Some parts in boldface…

THE BUREAU of Internal Revenue (BIR) is looking to collect taxes from online sellers on e-commerce platforms more efficiently.

BIR Commissioner Romeo D. Lumagui said it is difficult to monitor taxes on individual online sellers on e-commerce platforms.

“We’re in constant communication with the platforms, because it’s a challenge to monitor. We’re thinking of ways to approach it because if we look at individual online sellers, it’s a bit difficult. It’s a challenge,” he told reporters on Thursday evening.

Mr. Lumagui said the BIR is prioritizing ways to better collect taxes from online sellers and other new platforms this year.

The pandemic forced many entrepreneurs to shift to online selling using e-commerce platforms like Shopee and Lazada, as well as social media platforms such as Facebook, Instagram and Tiktok.

As of 2022, the Department of Trade and Industry (DTI) estimated there are around two million entities doing business as online sellers.

In 2021, the digital economy contributed 9.6% to the country’s gross domestic product (GDP), or about P1.87 trillion. DigiPinas, the multi-sectoral initiative led by UBX Philippines Corp., earlier said the Philippine digital economy can grow to as much as $150 billion or about P8.3 trillion in the next decade.

Meanwhile, Mr. Lumagui said the BIR will tap social media influencers to help educate the public on the importance of paying taxes.

“They have reach and I think that one way of making people comply with tax obligations is to educate the people since tax is a very complicated topic not easy to understand,” he said, adding the BIR will schedule a dialogue with them.

Mr. Lumagui said the BIR will continue its efforts to collect taxes from social media influencers, since they’re earning income. He noted there are already some who are undergoing tax audits.

“What we want is to dialogue with them that these are your obligations as social media influencers, you’re earning from whatever you’re doing, so this is your responsibility as income earners,” he said.

The BIR said it collected around P44.6 billion worth of tax from online content creators and retail sales at the end of 2021.

Let me end this piece by asking you readers: What is your reaction to this recent development? If you have been selling products or services online for the last twelve months, do you think the BIR’s move with taxing your business will negatively affect Philippine e-commerce as a whole? Have you set aside enough money for potential taxation by the BIR? What is the one thing about online selling that made you stay away from selling through physical establishments like a store?

You may answer in the comments below. If you prefer to answer privately, you may do so by sending me a direct message online.

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