DTI: Sellers operating on ‘irregular’ basis not required to register

MANILA, Philippines — Sellers that are operating “intermittently or irregularly” as well as those selling homemade items as a hobby are not required to register, the Department of Trade and Industry (DTI) said Friday.DTI Secretary Ramon Lopez made the remark after the Bureau of Internal Revenue (BIR) urged online sellers to register their business activities and settle their taxes not later than July 31.

“At any rate, the rule basically applies to those in business regularly selling even if such activity is small in size, it must be registered. Anyway, the annual income below P250,000 is exempted from the income tax according to the BIR ruling,” Lopez said during the online hearing of the House committee on ways and means.

“If one is just selling intermittently or on an irregular basis or selling homemade stuff as a hobby, it is understood they are not yet in business thus they are not required to register,” he added.

The trade secretary however did not elaborate on the definition of an “irregular basis.”

Lopez, however, underscored the importance of registering businesses with the government, saying that it is key to consumer protection.

“There is greater traceability if online sellers are registered and this increases the trust factor and confidence of online buyers in making the transaction online,” Lopez said.

“This addresses definitely the element of trust which is crucial if we are to grow the e-commerce industry in the country,” he added.

Lopez likewise believes that registration of online businesses is good for the e-commerce industry if the country wants the sector to grow.

He also noted that business registration will be beneficial for businesses in the future once their enterprise grows.

“We believe that eventually, these unregistered businesses will register as they grow in size sooner or later, they would have to borrow from formal lending institutions that will require registered audited financial statements or if they get to serve larger establishments, official receipts for their sales will be required, thus they would have to be registered,” Lopez said.

“DTI reiterates that business registration has always been the right way of doing business. It is needed in growing a business. It can also increase buyers’ confidence,” the trade secretary added.

Under BIR’s Memorandum Circular 60-2020, “all persons doing business and earning income in any manner or form, specifically those who are into digital transactions through the use of any electronic platforms and media, and other digital means” are reminded “to ensure that their businesses are registered pursuant to the provisions of Section 236 of the Tax Code, as amended, and that they are tax compliant.”

Later, BIR clarified that the said memorandum was not targeted towards small-time online sellers, noting that it was not collecting income taxes from those who earn P250,000 or less a year.

/MUF