Give online sellers financial assistance – Robredo

MANILA, Philippines — Instead of taxing micro online sellers, the government should provide them with financial assistance to help them survive the adverse impacts of the coronavirus disease 2019 (COVID-19) pandemic, Vice President Leni Robredo said yesterday.

Robredo made the suggestion following the Bureau of Internal Revenue (BIR)’s recent call for online businesses to register and pay their taxes.

“We understand how important accreditation is, but I hope our agencies have close coordination on this,” the Vice President said in her weekly program over dzXL. “They (online sellers) are just making their own strategies (to survive).”

Robredo said the Department of Trade and Industry (DTI) should be the one urging online businesses to register and not the BIR “because when it’s the BIR, the first thing that comes to a person’s mind is tax.”

She cited Republic Act 9178 or the Barangay Micro Business Enterprise Law, which aims to assist micro, small and medium enterprises or MSMEs by giving them several benefits such as tax exemption. Enterprises with at most P3 million in total asset value are eligible for BMBE benefits.

“They just need to register (with the DTI) so they can have access to (government) assistance,” Robredo said.

Under Revenue Memorandum Circular 60-2020 issued last June 1, the BIR requires online sellers and those making money through digital platforms to register with the tax agency and pay the necessary taxes. It gave sellers and other digital service providers until July 31.

Robredo found support in senators who believed that the government must first collect unpaid taxes – estimated to be as much as P200 billion – from Philippine offshore gaming operators or POGOs before squeezing money from online sellers.

Sen. Sherwin Gatchalian, vice chairman of the economic affairs committee, warned that collecting taxes from online sellers, particularly MSMEs, could dampen demand and affect other sectors like those engaged in delivery services.

“Because of the pandemic, many of our countrymen have lost their jobs and are finding ways to earn. Many of my friends learned how to bake, to cook, and other skills and do other things so they can sell online and earn a little,” Gatchalian told dzBB. “What’s surprising is whatever little income our countrymen earn at this time, the BIR wants to tax it.”

He said his recent calculation is that POGOs owe no less than P70 billion to the government, and the estimated arrears are just from 20 such Chinese-run firms.

Senate Minority Leader Franklin Drilon has a higher estimate of P200 billion, citing an article of Philippine STAR columnist Alex Cabrera, who chairs the Integrity Initiative Inc.

Drilon said the P200 billion, if collected, is more than enough to cover the P140 billion stimulus package pushed by the Department of Finance under the proposed Bayanihan to Recover as One.

Gatchalian said the BIR should defer its move to impose taxes on online sellers with the looming recession and record-high jobless rate.

Instead of focusing on going after small fry online sellers, he urged the government to help create a vibrant digital economy by resolving some of the key concerns of the e-commerce industry such as lack of trust, improving internet and logistics infrastructures, and lack of governing entity at the regional level that can fight cybercrime and settle cross-border disputes.

Meanwhile, Sen. Cynthia Villar said yesterday buying or supporting local products and services can help Filipino entrepreneurs and the economy recover faster from the COVID-19 crisis.

As chair of the Senate committees on environment and on agriculture and food, she stressed that the support for local products and services —  especially those offered by MSMEs — have become more urgent in the face of economic losses stemming from the crisis.

“Our MSMEs suffered because of the pandemic. It is high time we give premium to the mantra, Tangkilikin ang sariling atin (patronize our own) and really make it a point to buy Filipino products,” Villar said.

“There is a need to inculcate in each Filipino the wisdom of supporting our very own Filipino made products, and in the process, give due recognition to Filipino producers whose creativity and ingenuity brought us products and services which can be considered world-class,” she added. Paolo Romero