PSA, online sellers: You now need to register and pay taxes for your business

online seller bir

The e-commerce industry has grown ever since community quarantines were implemented nationwide. Not only did it help facilitate the continuous flow of goods while the operations of commercial establishments remained suspended, it also provided a source of income for many whose jobs have been affected by the pandemic. 

However, as announced in a circular dated June 1, online sellers and all businesses conducted online are now required to be registered under the Bureau of Internal Revenue (BIR) and pay taxes. This also applies to payment gateways, delivery channels, internet service providers and other facilitators. 

Both new registrants and those who are just updating their business statuses are given a deadline of July 31, 2020 in order to avoid incurring penalty for late registration. Those found violating this order shall be subject to applicable penalties under the law. Additionally, online business owners are instructed to “voluntarily declare their past transactions” for taxation purposes.

BIR also reminded that registering businesses would include ensuring the issuance of registered Sales Invoice or Official Receipt for every sale of goods or services. Online sellers and business owners must also keep registered Books of Accounts and other accounting records of business transactions

They are also tasked to comply with withholding taxes if applicable, filing required tax returns and paying their due taxes correctly and on time. 

This news garnered mixed reactions from netizens, with some agreeing with the measure in order to ensure consumer protection, and others raising concerns about how this will affect small-scale businesses.

Regarding the concerns for small-scale business owners, Senator Risa Hontiveros suggested that instead of going after online sellers, BIR might want to go after Philippine Offshore Gaming Operations (POGO) first for their P50 billion unpaid taxes. “Hindi ‘yung dagdag-perwisyo pa sa sarili nating mga kababayan na kaunti na nga lang ang kita para pandagdag-gastos sa pamilya nila,” said Hontiveros.

ACT-CIS party-list Representative Niña Taduran also voiced out her concerns, saying that the order was untimely due to the pandemic. “These online sellers just want to put food on the table. This might even be just a temporary activity for them until they find a more stable job,” said Taduran.

In response to this, presidential spokesperson Harry Roque announced on the afternoon of June 11 that online entrepreneurs earning less than P250k per year are exempted from paying taxes.


Header photo by on Unsplash

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