BIR to subject giant online platforms to withholding taxes

The Bureau of Internal Revenue (BIR) is exploring the option of implementing tax withholding measures on major online platform providers such as Lazada and Shopee.

The BIR said that it aims to ensure that taxes owed by online sellers of goods and services are collected more effectively.

A senior official from the BIR, who chose to remain anonymous, revealed that several advanced countries have already implemented similar measures to gather taxes from online transactions.

He said that while imposing withholding taxes on online platforms has sparked controversy, it is considered the most viable solution for collecting taxes from this source.

BIR Commissioner Romeo D. Lumagui, Jr. estimated, during a recent radio interview, that the government loses hundreds of billions of pesos annually due to the non-registration and non-payment of taxes by online sellers of goods and services.

Lumagui emphasized that the BIR is currently developing regulations that will compel online merchants to register and pay the appropriate taxes.

The intention behind these forthcoming regulations is to level the playing field by ensuring that online traders contribute their fair share of taxes.

The same source stressed the importance of online traders fulfilling their tax obligations in order to create a more balanced business environment.

He noted that the increasing earnings of online sellers have had a detrimental impact on physical merchants, resulting in reduced tax payments, particularly in the areas of rental and real estate.