BIR toughens up on tiangge operators

MANILA, Philippines - The Bureau of Internal Revenue is toughening up on establishments operating as tiangges or flea markets as part of efforts to increase its collections and ensure that everybody pays the right taxes.

The BIR has issued  new rules on the collection of business and income taxes from  what it termed as “privilege stores,” popularly known as tiangges.

Under Revenue Regulations 16-2013, the BIR defined a “privilege store” as a stall or outlet normally set up in  shopping malls, hospitals, office buildings, hotels, villages or subdivisions, churches, parks, streets and other public places for the purpose of selling a variety of goods and services for short durations or not more than 15 days.

“If the privilege store is operating more than one business activity in a separate venue or simultaneously operating several or multiple business activities in one venue, it shall be considered one day per business activity in the computation of cumulative number of days in a given taxable year,” the BIR said.

Stall operators who go beyond the 15-day limit need to register with the BIR as regular taxpayers and as such must have their own sets of invoices or official receipts and pay the appropriate taxes.

The organizer, which refers to the primary lessee of the entire space where the operations of the tiangge operators are held, must submit to the BIR the list of names, residence addresses, stall, slot or unit number and individual taxpayer identification number of persons participating in the event or exhibit.

They must also make sure that the tenants are properly registered with the BIR.

Bazaar participants, on the other hand, are required to withhold tax on rentals at the rate of five percent of the gross rental payments.

Aside form issuing  official receipts and invoices, stall owners must  submit an information statement indicating the total number of days of business operations.  They are also mandated to keep books of accounts and submit a list of sales during their operations within five days from the start of the event.

Bazaar organizers are required to provide cash register machines or pot of sale for each stall operator or centralized payments centers in order to monitor the sales.

The new rules are aimed at promoting voluntary compliance from taxpayers to shore up more revenues and expand the BIR’s registration databank with the inclusion of non-registered taxpayers ferreted out by tax authorities.