ALL INSIGHT

authorities could padlock the establishment and prevent it from conducting further business. How can the government prevent someone from conducting business in the digital world? This cannot be done effectively. The BIR might be able to shut down a few big and “known” businesses, but not all.

Remittance of taxes in the correct amount. The presumptive online tax law will require the network orchestrators, say Lazada, to withhold the VAT that the customers would be paying. How would the BIR confirm that the network orchestrator had paid the correct amount? Considering in our example that Lazada operates in more than one territory ( meaning in other countries as well) and the partner sellers are global, with its customers also global, how would the BIR segregate the sales coming only from the Philippines?

Precise location of buyers and subscribers. It has to be noted that only consumers from the Philippines will be subject to VAT. What would be the basis — the billing address or the delivery address? One can have a billing address outside of the Philippines, but the delivery is in the Philippines (say, a relative abroad bought an item and had it delivered to the family in the Philippines). Another possibility is that the billing address is here in the country, but the delivery destination is outside of our geographical territory.

Exact location can be hidden. The “physical” location of any individual (or group, as the case MAY BE) IS NORMALLY IDENTIfiED BY USing their associated IP address. The IP part of the IP address stands for “Internet Protocol.” The “address” part refers to a unique numerical label assigned to each device connected to the Internet. One use of the IP address is to identify the physical location of the user. However, there are ways that the IP address can be spoofed or faked — showing a false “physical” location. Does our government have the ability to track these IP addresses?