Retail group backs tax on digital transactions
MANILA -A local trade association of retailers on Thursday said it was backing a proposed legislation which aims to tax digital transactions, citing that it will help level the playing field for online retailers and the more traditional brick-and-mortar stores.
Roberto Claudio, president of the Philippine Retailers Association (PRA), said that this is one of the significant challenges faced by the local industry today, citing the undue advantage that foreign, online retailers have compared to operators of physical stores.
“Ensuring that online retailers adhere to the same laws and ordinances that traditional stores abide by is crucial,” Claudio said during the 29th National Retail Conference and Expo at the SMX Convention Center in Pasay.
“Matters such as taxation, duties, product standards, intellectual property, price tags, official receipts, and truth in advertising among others, must be upheld consistently across all online marketplaces,” he added.
Senate proposal
The PRA official said it stands firmly behind the proposed bill in the Senate, mentioning in particular Senate Bill No. 250 that was authored by senators Pilar Juliana “Pia” Cayetano and Sherwin Gatchalian.
Senate Bill No. 250 seeks to impose a 12-percent value added tax (VAT) on digital transactions.
Aside from this taxation policy, the PRA said it is also pushing for legislation on VAT refunds for nonresident tourists in the Philippines, noting that it will help revitalize the tourist industry, which in turn, will have a positive impact on the retail industry.
“We recognize the immense potential this bill holds in attracting more tourists, stimulating retail businesses, and fostering overall economic growth,” Claudio said, adding that the proposed legislation on this is expected to undergo deliberation in the Senate in the coming weeks.
He added that they also anticipate that it will be ready for an industry-wide implementation by the first quarter of 2024.
The PRA official said that the local retail sector will also experience a significant change in the barcode system which is used worldwide, adding that there will be a transition to an updated scheme.
He added that they anticipate that a working VAT refund system for foreign tourists will be ready for an industry-wide implementation by the first quarter of 2024.
The PRA official said that the local retail sector will also experience a significant change in the barcode system which it is currently using along with the global industry, adding that they are targeting a transition to an updated scheme in the next two years.
“The whole world will transition from the one dimension, black and white vertical lines to QR Code matrix two-dimensional barcodes. The Philippine retail industry will spearhead the transition by mandating manufacturers and distributors to migrate to the QR matrix barcode for worldwide simultaneous implementation by 2025,” he said.
