Government asked to rethink plan to tax online sellers

By Louella D. Desiderio, The Philippine Star

Posted at Aug 13 2012 07:44 AM | Updated as of Aug 13 2012 10:16 PM

MANILA, Philippines - The government may have to rethink its plan to collect taxes from entrepreneurs selling via the Internet as the move will require an approach different from that of traditional merchants, officials of online shopping spaces said.

Multiply Philippines country manager Jack Madrid told reporters in a chance interview the government must understand that dealing with online sellers will not be the same as dealing with traditional merchants.

“Maybe the BIR (Bureau of Internal Revenue) doesn’t fully understand but I hope they do, what it takes to collect, to get the right reports and file the right returns and means of collecting because it can’t be the same old way as traditional merchants,” he said.

He noted that online sellers are very different from traditional merchants since their sales or transactions take place through the Internet.

Unlike in usual sales transactions where receipts are issued, online transactions do not involve sellers issuing the same to the buyers.

For her part, Me-Anne Bundalian, senior manager for business development, sales and marketing at Sulit.com.ph, told reporters that if the BIR will pursue its plan to collect taxes from online sellers, the agency has to be prepared to implement it.

In order to require online sellers to pay taxes to the government, she said the BIR must come up with ways to make the registration of the business and issuance of receipts convenient for entrepreneurs.

“If they really want to tax now, they should make it easy for people to apply for permits or even issue online receipts because we are talking about a different channel,” she said.

She also said that while they support the move of the government to collect taxes to support the country’s development, the BIR must understand that most of the online sellers do not rely on their business as a primary source of their income.

Some are selling goods such as shirts online as a hobby or to have money to be used for school fees.

Some are also selling items like shoes and books online which are not new, but have already been used.

Madrid said that while Filipinos should pay their taxes to the government, the BIR may have to consider if now is the right time to go after online sellers with e (electronic) - commerce currently below one percent of the country’s total retail sales.

“Is it the right time to focus on this now, before they even become big because I think the Internet or e-commerce is a path towards self-sustainability for Filipinos...are you going to let them grow so that their incomes will grow and their taxes will grow higher in the future or are you going to get them now?” he asked.

“Let this industry breathe first and then...maybe in the future, when people are adept with what e-commerce is, we can decide who should be taxed and who shouldn’t,” Bundalian said.

BIR Commissioner Kim Jacinto-Henares was reported to have said earlier the agency is planning to start collecting taxes from online businesses.

By collecting taxes from online businesses, the entrepreneurs will have to be registered to the BIR and issue necessary receipts or invoices.

The BIR which is aiming to get P1.06 trillion worth of taxes this year has collected P521.159 billion as of end-June.