DTI registers 60,000 small businesses in 4 months
The names of more than 60,000 businesses have been registered under the Department of Trade and Industry since the lockdown began in March as more online entrepreneurs take steps to join the formal economy.
These entrepreneurs would still need to secure a business permit from the local government to operate, but Trade Secretary Ramon Lopez said this already signaled a growing interest during the pandemic.
“A lot of businesses registered [their names until July]. From January to March, there were only 1,700 [newly registered business names],” he said.
The Bureau of Internal Revenue (BIR) gave online businesses until Aug. 31 to register without any penalty. This extended the deadline by another month, when it was earlier supposed to end last July 31.
Taxing online businesses is not new since the requirement was put in place as far back as 2013. However, the decision of the Duterte administration to push for strict compliance in the middle of a pandemic drew criticisms for being ill-timed.
The Department of Finance, through the BIR, wants online sellers to register so they could pay the right taxes.
While the amount of tax to be paid will vary, a seller earning P250,000 a year does not have to pay any income tax under the current rules.
However, sellers who do business only from time to time as a hobby during the pandemic are not yet considered to be in business. Therefore, they are not required to register, according to a previous DTI statement.
Back in June, the DTI estimated that there were probably more than 6 million micro entrepreneurs that are not registered, while only about 1.5 million micro entrepreneurs are in the government’s roster.
Lopez said that businesses would inevitably have to register as their operations grew.
“We know, however, that eventually, the unregistered business will register as they grow in size because sooner or later, they will have to borrow from formal lending institutions like banks and their audited financial statements will be required,” Lopez said. INQ
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