Gatchalian on BIR proposal to tax online sellers: ‘Ill-timed, insensitive’

Senate PRIB

MANILA, Philippines — Senator Sherwin Gatchalian has dismissed as “ill-timed” and “insensitive” the move of the Bureau of Internal Revenue (BIR) to tax online resellers who are still reeling from the impact of the coronavirus pandemic.

Gatchalian said Saturday that the proposed taxation is not only an added “unnecessary burden” to entrepreneurs, but it would also compel online sellers to pass on the additional expenses to their customers.

“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 said.

(Right timing on imposing or increase in taxes is important. It is not right for the BIR to impose tax on online sellers, most of who are starting over after losing their jobs due to the Enhanced Community Quarantine.)

“Dahil sa kailangang mapanatili pa rin ang social distancing lalo na’t wala pang nadidiskubreng bakuna sa COVID-19, mas hinihikayat pa nga natin ang lahat na gumamit ng teknolohiya para lumipat na sa tinatawag na digital economy,” he added.

(Since social distancing is important, especially now that a cure for COVID-19 hasn’t been discovered, we should even encourage everyone to use technology to shift to the digital economy.)

The BIR has directed online sellers to register their businesses and settle their taxes not later than July 31.

The Department of Finance (DOF), of which the BIR is one of the revenue-generating agencies under the DOF, said that the move was not to go after merchants who have unreported sales or unpaid taxes, but rather to encourage them to register with the BIR.

Gatchalian, meanwhile, also warned that “premature taxation” on online sellers at the height of the pandemic “will impede the growth of the country’s growing digital economy.”

He then urged the government to help create a “vibrant digital economy” by resolving some key concerns of the eCommerce industry, such as lack of trust, improving internet and logistics infrastructures, and lack of governing entity at the regional level.

“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,” he said.

“I believe premature taxation will only do harm than good to our growing digital economy,” Gatchalian said.

Palace backs taxing online sellers, but those earning P250K below are exempt