"Ill-timed and insensitive.”
That’s how Senator Sherwin Gatchalian branded the move of the Bureau of Internal Revenue to tax online sellers while the country was battling the new coronavirus disease (COVID-19) pandemic, which caused lockdowns in much of the country since March 16.
The BIR has directed online sellers to register their businesses and settle their taxes not later than July 31.
The Department of Finance, of which the BIR is one of its revenue-generating agencies, said the move was not meant to go after merchants who have unreported sales or unpaid taxes, but rather to encourage them to register with the BIR.
In an interview over DZAR, Gatchalian said the proposed taxation was not only an added “unnecessary burden” to entrepreneurs, but it would also compel online sellers to pass on the additional expenses to their customers
He noted that right timing on imposing or increasing taxes was important.
It is not right for the BIR to impose tax on online sellers, most of whom are starting over after losing their jobs due to the Enhanced Community Quarantine, Gatchalian said.
Because it is important to maintain social distancing especially now that a cure for COVID-19 has not been discovered, Gatchalian cited the need to even encourage everyone to use technology to shift to the digital economy.
He also warned that “premature taxation” on online sellers at the height of the pandemic “will impede the growth of the country’s growing digital economy.”
“I believe premature taxation will only do harm than good to our growing digital economy,” Gatchalian said
He called on the government to help create a “vibrant digital economy” by resolving some key concerns of the eCommerce industry, such as lack of trust, improving internet and logistics infrastructures, and lack of governing entities at the regional level.
“Before we impose new taxes on the digital economy, we should first think of ways on how we are going to develop this industry in order to provide more jobs and opportunities to all Filipinos,” he said.
Senator Juan Edgardo Angara earlier said the BIR timing in imposing taxes on online sellers was not the best, given the difficulties faced by Filipinos facing the challenge of the COVID-19.
‘’But these are not new taxes, but just collection of taxes due under existing laws. So if you ask a seller who has a store, he will say it’s only fair to have a level playing field since that seller pays the transaction taxes due,’’ said Angara, chairman of the Senate finance committee.
‘’It should’ve been done earlier, really,’’ he added.
Sen. Joel Villanueva was also disappointed with the state’s sudden pursuit of online sellers.
This was also the same sentiment echoed by opposition senator Risa Hontiveros. She said the government, rather than taxing online sellers, should have focused its attention more on collecting P50 billion in unpaid taxes racked up by Chinese-run Philippine offshore gaming operators (POGOs).