BIR chases billions from online sellers

Uncollected taxes

MANILA, Philippines — Uncollected taxes from online businesses may have already reached billions of pesos, according to the Bureau of Internal Revenue.

BIR Commissioner Romeo Lumagui Jr. said the agency is intensifying efforts to monitor online sales and coordinate with digital platforms to ensure compliance with tax laws and prevent further revenue losses.

“What we can say for certain is that online transactions have grown significantly, which is why we really need to concentrate our efforts on closely monitoring online sales and activities,” he told The STAR.

The BIR issued a revenue memorandum circular last year, ordering electronic marketplace operators to impose a one-percent withholding tax on their sellers and merchants.

It stated that the move seeks to balance the playing field between traditional brick-and-mortar establishments and online marketplaces, emphasizing that all merchants are required to pay their fair share of taxes, regardless of whether they operate in a physical or digital capacity.

A withholding tax is a levy on an employee’s income, where employers are mandated under existing regulations to deduct a specific portion of the salary and remit it directly to the BIR.

Industry data show that more than two million people in the country are engaged in electronic commerce, reflecting its growing role in the economy.

Lumagui said it is continuously coordinating with online merchant platforms and the Department of Trade and Industry on how to implement the shutdown of websites that fail to pay the required fees.

“All of us are keeping a close watch on social media, and every time we see that they have potential sales there, it becomes quite evident to us,” the BIR chief said.

Earlier this year, the Philippine Retailers Association urged the government to impose a value-added tax on physical goods sold through e-commerce platforms, saying many of these transactions remain untaxed and put traditional brick-and-mortar retailers at a disadvantage.

From January to August, the BIR’s revenue increased by 11.4 percent to P2.14 trillion. The revenue target for the agency this year was adjusted slightly to P3.22 trillion from P3.23 trillion.