Bureau of Internal Revenue Commissioner Romeo Lumagui Jr. said Tuesday he approved an extension of the transitory period for the compliance by online sellers and merchants on withholding tax system.
Revenue Regulations No. 16-2023 implements a withholding tax system on gross remittances made by electronic marketplace operators and digital financial services providers to sellers/merchants.
Lumagui issued Revenue Memorandum Circular No. 55-2024 extending the transition period by 90 days or until July 14, 2024. The extension was made after considering the private sector’s request in relation to implementing RR No. 16-2023, he said.
“This 90-day extension of the transitory period under RR No. 16-2023 shows the BIR’s commitment in listening to the voice of the private sector. This is part of my administration’s thrust on excellent taxpayer service. We hear the thoughts of the private sector, and if the same is reasonable, then we make policy adjustments for the benefit of the Filipino people,” he said.
RR No. 16-2023 was issued to enhance the government’s effort to regulate and tax online transactions.
The online transactions industry experienced significant growth during and after the pandemic, but the BIR said many online sellers were not paying their just share in taxes.
This is unfair to brick-and-mortar stores that are regularly complying with their tax obligations, the agency said.