Hontiveros wants to delay tax on online vendors as BIR mulls extending registration
MANILA, Philippines — Senator Risa Hontiveros on Monday filed a resolution urging the Bureau of Internal Revenue (BIR) to suspend the implementation of a tax memo on online sellers until year-end, but the agency said taxmen are simply enforcing the law.
“Our revenue policies should be responsive to the difficulties faced by many Filipinos during this [COVID-19] pandemic. Many new online sellers lost their jobs or businesses and are now improvising on the internet,” Hontiveros said in a statement on her Resolution 453.
“They're earning very little, there is no transportation available for them to go to the BIR office, and it will risk their families' health if they leave the house,” she said.
Apart from delaying BIR Revenue Memorandum Circular 60-2020’s enforcement, the resolution also called on the Senate to probe the agency’s decision to tax sales by online businesses, which Lower House legislators criticized last week for adding burden to the public trying to make ends meet during the pandemic.
RMC 60-2020, dated June 1, specifically asked vendors in any form of electronic media to register with the BIR until July 31 and pay levies corresponding to their past sales, or risk penalties after the due date.
“Requiring people to congregate at the BIR’s offices likewise exposes them to the health risks associated with COVID-19 (coronavirus disease-2019) and might also lead to further spreading the disease and prolonging the pandemic,” the resolution said.
Sought for comment, BIR Deputy Commissioner Arnel Guballa said in a text message "revenue laws emanate from Congress,” indicating that it is within legislators' powers to change the law BIR currently enforces.
BIR has repeatedly justified its plans to register online sellers on two fronts. One, that the latest circular merely reiterated a 2013 memo from the previous administration to remind online sellers of their duty to pay taxes, a matter consistent with the National Internal Revenue Code of 1997 that requires all businesses to make tax payments.
A resolution similar to the one filed by Hontiveros does not amend the law.
Two, BIR, in last week’s hearing of the House ways and means committee, said the government is scouring for more revenues to fund a growing bill for pandemic response. And since many businesses have transferred online due to movement restrictions in place, BIR aims to catch revenues from these activities.
Latest Treasury data released Tuesday showed revenues plummeted 52.3% year-on-year in May at the height of quarantine controls. From January to May, state revenues dropped 16.1% annually.
Extending registration deadline
Hontiveros, however, said that as it is, the BIR circular is “hard to follow, especially since government agencies are contradicting one another.” “It is best for everybody’s interests if the BIR suspends the implementation of the memo until December 31, 2020, while government agencies review and craft better policy guidelines on how online entrepreneurs should register or pay taxes,” she explained.
Before Hontiveros’ suggestion to suspend online taxes, lawmakers already recommended to BIR to extend the July 31 deadline on tax registration to give vendors ample time to apply for tax identification numbers. Guballa said this is being considered and that a decision will be made “sometime in July.”
“The situation about quarantine/lockdown will be taken into consideration,” he said.
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