Online businesses press BIR for more time

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HE Bureau of Internal Revenue (BIR) is keen on extending the deadline for the registration and submission of a Sworn Declaration of Gross Remittance for online sellers for another 90 days to avoid the automatic deduction of 1-percent withholding tax from their total income. at a news briefing this stance was after receiving requests from onlineselling platforms to move further the April 15 deadline for the registration and submission of the documents the BIR requires through Revenue Regulation (RR) 16-2023.

“We’re still looking into whether we will issue [an announcement] if we need to extend the deadline,” Lumagui said in a mix of English and Filipino.

“Maybe we can extend it for another period of 90 days because we need to see if there is a need for an extension because we want to be reasonable as well,” Lumagui added in Filipino.

This, Lumagui noted, will give some leeway for online selling platforms to “fix their systems” since the electronic marketplace operators will deduct the 1-percent withholding tax of one-half of gross remittances of online sellers.

“As a general rule, everyone who does business and earns money needs to be registered to the BIR and has to pay the appropriate taxes. That is everyone’s obligation,” whether they sell online or physically, Lumagui said.

The registration of online sellers’ businesses would ensure protection for the consumers as the sellers would be accountable if ever the products they sold were defective, Lumagui added.

Starting April 15, local online sellers who fail to submit a sworn declaration of gross remittances that their total income exceeds P500,000 in the previous or current year to the BIR Revenue District Office (RDO) will automatically be deducted a 1-percent creditable withholding tax by the online platform where they trade.

RR 16-2023 imposes a 1-percent withholding tax on one-half of the gross remittances made by e-marketplace operators and DFSPS to sellers and/or merchants for the goods or services sold and/or paid through their platform and/or facility.

Online sellers and merchants with an annual income equal to or below P500,000 are exempted from the imposed 1 percent withholding tax provided that they will also submit a sworn declaration stamped and verified by their BIR RDO.

Lumagui said they are targeting to tax big online sellers to balance the competition between traditional brick-and-mortar businesses that pay taxes properly unlike the former.

He added that the BIR is banking on a soft approach, particularly through an information campaign, to encourage online sellers and inf luencers to comply with the Bureau’s regulations.

“They are not criminals that have to be pursued or chased after immediately that is why we are doing soft approach, information awareness, having dialogues with them, telling them that these are their obligations,” Lumagui said in Filipino.