MANILA, Philippines — Senator Risa Hontiveros on Wednesday urged the Bureau of Internal Revenue (BIR) to withdraw, review, and rewrite its memorandum directing online sellers to register and pay taxes amid the coronavirus pandemic.
Hontiveros said the BIR Memorandum Circular 60-2020 alarmed online sellers, noting it has been criticized by several individuals as “ill-timed” and “insensitive.”
“Naging magulo para sa mga online sellers ang memo mula sa BIR. Mabuti pang bawiin, i-review, at i-rewrite muna ng ahensiya ang guidelines na nilabas nila,” she said in an online forum.
(The memo from the BIR has been confusing for online sellers. It is better for the agency to withdraw, review, and rewrite the guidelines they released.)
The senator also called for the BIR to adjust its July 31 deadline for the business registration and payment of taxes of online sellers, especially since the country is still suffering from the ills of the pandemic.
The BIR earlier said it issued the memorandum dated June 1 “to give notice to 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, 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.”
“These shall include not only partner sellers or merchants, but also other stakeholders involved such as the payment getaways, delivery channels, internet service providers, and other facilitators,” the BIR earlier said.
However, Deputy Commissioner for Operations Arnel Guballa later clarified that the bureau is only after taxing big online merchants and that online sellers earning less than P250,000 a year are exempted from the income tax.
Hontiveros said clarifications on the memorandum should be done in writing.
“As of today, RMC 60-2020 is still enforceable. Strictly speaking, its text still mandates all, including small online sellers, to register with the BIR,” she explained.
“Magandang magdeklara muna ang BIR ng moratorium sa pagpapa-register ng online sellers at bawiin muna ang mga guidelines sa ilalim ng RMC 60-2020, habang nasa panahon tayo ng krisis,” she added, noting that many Filipinos who lost their jobs during the pandemic have turned to online selling.
(It is better for the BIR to declare a moratorium in the registration of online sellers and withdraw the guidelines under RMC 60-2020 while we are under a crisis.)
Hontiveros also pointed out that the enforcement of the memorandum may still force small online sellers to shell out for registration with the BIR and avoid penalties.
She said that although small online sellers may be exempt from paying income taxes, the said circular in effect will still require them to not only physically go to BIR offices but to also spend around P2,260 to fully comply with all documentary requirements needed by the BIR.
Instead of imposing new obligations that may discourage online sellers, Hontiveros said the government should invest in making online selling a “more secure experience” by addressing online fraud, ‘joy-dibbing’ (reserving an item with no intention of buying it), and other abusive trade practices of sellers or customers.
She also reiterated her call on the government to instead intensify efforts to collect billions in unpaid taxes from Philippine Offshore Gaming Operators.