Online entrepreneurs need incentives and assistance, not tax bill — Gatchalian
MANILA, Philippines — Senator Sherwin Gatchalian on Monday urged the government to "extend fresh capital and other financial assistance to budding online entrepreneurs, instead of slapping them with untimely new taxes."
He previously called the Bureau of Internal Revenue's decision to tax online sellers amid the novel coronavirus-induced lockdown ill-timed and insensitive.
Gatchalian, who is also the vice chairman of the Senate Committee on Economic Affairs, said that online sellers should be covered by government-owned Small Businesses Corporation's (SBC) micro-financing program.
He further explained that the SBC set up a P1-billion Enterprise Rehabilitation Financing facility "to support micro and small businesses affected by the economic impact of [COVID-19] in the country."
The micro-financing program offers loans at an interest rate of 2.5% or less per month with no collateral requirement. Micro businesses whose assets amount to P3 million or less can borrow from P10,000 to P200, 000 while small enterprises whose asset size is not more than P10 million can be loaned higher amounts with a cap of P500,000, Gatchalian said.
Registration amid quarantine
The senator also stressed that the BIR requires the physical presence of applicants which would be problematic since people are still encouraged to stay home.
"Our government is not ready to tax our small business owners because they are not yet ready to conduct the registration process so let's not force it during this time of a pandemic because many are struggling and many are afraid to leave their homes," Gatchalian said in Filipino
The BIR last week said that it will not go after small online businesses but is instead looking to tax big online shopping platforms and digital services.
BIR Deputy Commissioner for Operations Arnel Guballa said the bureau ordered online sellers to register to determine the total population of individuals and enterprises earning money through digital platforms.
He added that the bureau's aim is to get large online businesses such as Lazada, Netflix and Google into the country’s tax net.
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