MANILA, Philippines — Over 7,000 online sellers have registered with the Bureau of Internal Revenue (BIR) which has now proceeded with monitoring these firms for tax payments.
A total of 7,030 online vendors have secured tax identification numbers from the tax bureau which is still also studying a possible fresh extension on registration deadline set on Wednesday, BIR Deputy Commissioner Arnel Guballa said in a text message on Monday.
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“The (possible) extension is based primarily to accommodate the new business in online selling due to restrictions of quarantine procedures,” Guballa said. The deadline had already been extended twice to August 31 and then to September 30.
“After the registration period, penalty will be collected to those who failed to register,” he said.
Apart from registering before BIR, Revenue Memorandum Circular 60-2020 also ordered online vendors to report their past sales and pay corresponding 12% sales taxes on them. Guballa said BIR’s Information Systems Group is already “tagging online sellers to monitor their payments.” "Tagging means to mark and monitor the taxpayers so we know the payments made," he explained.
But the bureau’s warning to run after unregistered online enterprises thereafter appeared to gain little traction. Since registration started last June, online vendors captured by BIR so far has not amounted even to half the 60,000 registered online businesses with the trade department.
BIR, which annually accounts for over 80% of tax revenues, has turned its sights to online firms to boost revenue collections as brick and mortar establishments were forced to halt operations due to pandemic-induced lockdowns, leaving fewer sales and therefore tax to collect.
At the House of Representatives, legislators at the ways and means committee last July likewise passed a digital economy tax, one that charges online sales of firms earning P3 million or more yearly. A counterpart bill at the Senate remains at the committee level.
As it is, existing tax laws do not differentiate local sales subject to tax according to their medium or platform of selling. But BIR saw the need to clarify tax regulations after the pandemic forced a drastic shift of economic activity online, making it a clear and sizable source of tax revenues.
The impact of the health crisis on state revenues cannot be denied. From January to August, BIR raised P1.3 trillion, down from 10.3% year-on-year, Bureau of the Treasury data showed.
The declining trend is expected to persist with economic managers forced to slash BIR’s target for the year thrice since the pandemic struck last March. The agency is now tasked to collect P1.74 trillion, down nearly a fifth from last year’s P2.17 trillion actual revenues.