Taxing online sellers ‘ill-timed’ and ‘insensitive’–Gatchalian

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Hearing on National Power Transmission Grid

Senator Sherwin Gatchalian on Saturday branded “ill-timed” and “insensitive” the move of the Bureau of Internal Revenue (BIR) to tax online resellers while the country is battling the new coronavirus disease (COVID-19) pandemic.

The BIR has directed online sellers to register their businesses and settle their taxes not later than July 31.

The Department of Finance (DOF), of which the BIR is one of the revenue-generating agencies under the DOF, stressed  the move was not to go after merchants who have unreported sales or unpaid taxes, but rather to encourage them to register with the BIR.

Gatchalian said the proposed taxation is 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 increase in taxes is important. It is not right for the BIR to impose tax on online sellers, most of who are starting over after losing their jobs due to the Enhanced Community Quarantine.

Because it is important to maintain social distancing especially now that a cure for COVID-19 hasn’t been discovered,  Gatchalian cited the need to even encourage everyone to use technology to shift to the digital economy.

The senator 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 then 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 entity 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 M. Angara earlier said the BIR  timing in imposing taxes on online sellers is 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)./Stacy Ang

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