BIR further extends deadline for online sellers to register
MANILA, Philippines — Online vendors were given a fresh one month extension to register with the Bureau of Internal Revenue (BIR) or risk getting fined thereafter.
In a text message on Tuesday, BIR Deputy Commissioner Arnel Guballa said online merchants are now given until Sept. 30 to get tax identification numbers before the bureau. “Hopefully, this is the last extension,” he said.
BIR originally gave online sellers from June to July 31 to register or risk getting run after by taxmen for their dues. Upon prodding by lawmakers, the deadline was prolonged by a month to August 31, before the latest extension.
The original order for vendors in the Web to register was contained under Revenue Memorandum Circular 60-2020. On top of registering their businesses, the circular required merchants to declare past transactions and pay their corresponding duties from these sales.
As of Tuesday, Guballa said 5,650 online sellers have registered before BIR. Separate data from the trade department showed there are about 60,000 online businesses.
The BIR circular directed not only online merchants but also payment platforms, delivery channels, and internet service providers, to register for tax purposes. If business owners have secured TIN already, taxmen still asked businesses to come before the agency for validation.
The bureau drew flak both from the public and lawmakers when the order was issued last June. In the face of a job-killing pandemic, legislators initially questioned BIR’s tack to capture taxes from online firms, which likely are just people trying to get by during the hard times.
That said, Congress also recognized BIR’s need to raise revenues to fund public programs that include a costly pandemic response. Since consumers were stuck at home and brick and mortar firms likely shuttered, BIR admitted taxing online sales is a way to recoup government earnings.
As it is, under the law, local sales regardless of platform are mandated to be taxed and the BIR’s order simply stressed this. However, taxmen have struggled to collect levies from online platforms, primarily due to a lack of mechanism to monitor their activities. After the new deadline, it remains unclear how BIR plans to penalize non-registrants.
BIR, which accounts for 80% of tax revenues annually, is so far falling short of its target revenue collections. From January to July, the agency raised P1.12 trillion, down 10.5% year-on-year. BIR is tasked to collect P1.69 trillion this year, down from last year's P2.18 trillion.
Efforts to tax online activities have already reached Congress. A bill that reinforces a 12% value-added tax on digital services and online ads, such as Netflix and Lazada, was passed by the House ways and means committee last July. The bill’s proponents see an additional P10.66 billion in revenues on the first year of the measure.
The measure was introduced amid increased online activity while Filipinos were in lockdown.
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