Senator Sherwin Gatchalian said the government could be spending more money in monitoring 900,000 online business owners, which the Bureau of Internal Revenue (BIR) ordered to register and pay tax.
Gatchalian, Senate economic affairs committee vice-chair, said instead of going after small businesses, the taxman should just focus on collecting around P70 billion unpaid taxes of 24 Chinese-owned Philippine offshore gaming operators (POGOs).
“For me, this [decision of the BIR] is the height of insensitivity,” he said. He noted that most online sellers are employees who lost their jobs due to the COVID-19 pandemic.
“In [introducing new] taxation, timing is very important. In this time of pandemic, it’s not right to impose taxes on new or small entrepreneurs,” Gatchalian said in a radio interview.
“The administrative costs in the registration, auditing, and monitoring of [online sellers] could be more expensive than the taxes that the government would be able to collect from them,” he argued.
Gatchalian added the order would also expose more people to the virus when they go out to register their online business and pay tax to the BIR.
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The Senator added that if the BIR would push through with its plan, the online business registration should be at least done online to ensure the safety of online sellers.
“Imagine if all the small business owners would be required to go to the BIR [offices] to register. It would not only lead to the transmission [of the coronavirus] but also cause [logistical] problems,” he said.
“All persons doing business and earning income in any manner or form, specifically those who are into digital transactions through the use of any electronic platforms and media, and other digital means, to ensure that their businesses are registered pursuant to the provisions of Section 236 of the Tax Code, as amended, and that they are tax compliant,” the BIR said on its Revenue Memorandum Circular No. 60-2020, dated June 10.
The order covered not only partner sellers or merchants, but also other stakeholders such as payment gateways, delivery channels, internet service providers, and other facilitators.
Those who will not register their business activity and/or update their registration status on or before July 31, 2020, shall be imposed with a penalty for late registration.
Presidential spokesperson Harry Roque meanwhile insisted that the government is collecting the unpaid taxes of POGOs.