Regulation of e-commerce industry pushed

Valenzuela City Rep. Wes Gatchalian disclosed yesterday that online trade in the country has ballooned to a $7-billion industry and now needs regulation to protect both consumer and merchant.

Gatchalian, chair of the House trade and industry committee, said a law is needed to ensure protection of the ecommerce industry, which is expected to further boom as Filipinos brace for the “new normal” of buying things through the internet while facing the coronavirus disease 2019 (COVID-19) pandemic.

“The Philippines stills lacks policies on e-commerce. We want to build trust between consumers and merchants,” he said during the weekly Kapihan sa Manila Bay online forum.

Gatchalian earlier filed House Bill 6122, or the proposed Internet Transactions Act, seeking strong regulatory policy on internet trade.

Under HB 6122, commercial websites and providers would be required to secure permits from the Department of Trade and Industry (DTI) and would be given trust marks that they can use to gain the confidence of consumers.

He revealed that internet trade in the country has not yet seen its full potential.

“We’ve seen how fast the landscape for e-commerce in the Philippines grew over the past years from $2 billion in 2015 to $7 billion last year. Despite this, we still lag behind in gross market value of ecommerce in the region and the average amount spent by an online shopper is only $18,” he stressed.

“Filipinos still prefer to pay in cash. This means our internet economy has a lot of room for growth,” Gatchalian pointed out.

He said that e-commerce currently contributes only about 2.1 percent to the nation’s gross domestic product despite 67 percent of the population or 73 million Filipinos being active internet users.

The regulation of online trade will be handled by a new e-commerce bureau under the DTI.

Gatchalian said his bill proposes regulatory measures that would apply only to online trade involving commercial quantities and would not cover single items being sold online.

Foreign-based digital service platforms have expressed willingness to comply with the government’s proposed tax regulations on online transactions, particularly the value-added tax (VAT), an official of the Department of Finance (DOF) said yesterday during the same Kapihan sa Manila Bay virtual forum.

Finance Undersecretary Antonette Tionko reiterated that the government is looking to impose VAT on online transactions, including those offered by foreign companies such as Amazon and Netflix.