Amid the boom of online shopping and technology-driven businesses, the Philippines Retailers Association (PSA) has expressed support for equitable regulations, measures and policies to address the inequalities posed by online local and foreign merchants, to the disadvantaged of conventional brick-and-mortar stores.
Bobby Claudio, president of the PRA and chairman of Quorum International, addressed the delegates at the opening of the two-day 29th National Retail Conference and Expo (NRCE) on Aug. 10, calling for an "equitable playing field" is a crucial aspect in improving competition and sustaining growth within the the local retail industry.
"One significant challenge we face is the unlevel playing field created by online foreign merchants. Ensuring that online retailers adhere to the same laws and ordinances that traditional stores abide by is crucial. Matters such as taxation, duties, product standards, intellectual property, price tags, official receipts, and truth in advertising among others must be upheld consistently across all online marketplaces. Addressing this concern is of paramount importance to our retail community," he said.
To address the situation, Claudio cited PRA's support for Senate Bill 250 or the proposed Internet Taxation Law, authored by Senators Pia Cayetano and Win Gatchalian, which seeks to streamline the Bureau of Internal Revenue (BIR)'s authority to collect taxes on the digital transactions.
Cayetano's bill aims to "level the playing field between traditional and digital businesses by clarifying the imposition and collection of value added tax (VAT) from digital service providers, which are required to help the government monitor and collect VAT from persons engaging businesses on their digital platforms."
"We firmly believe that this bill will pave the way for a more equitable business landscape in the Philippine Retail Industry, benefitting both local and international online players," Claudio said.
Aside from this, the PRA is also advocating for the proposed bill on VAT refunds for non-resident tourists in the country, which is expected to enhance the Philippines' overall shopping and tourism experiences, benefit the respective sectors, stimulate retail businesses, and foster economic growth.
In addition, Claudio said the PRA will spearhead the transition to the barcoding system, from a one dimension black and white vertical lines to a QR code matrix with 2-dimensional barcodes, in a bid to keep up with technological advances in the global retail system. Following its implementation, manufacturers and distributors will be mandated to migrate to the QR matrix barcodes by 2025.
Moreover, the PRA has been actively championing the proposed bill on VAT Refunds for Non-Resident Tourists in the Philippines.
This crucial legislation seeks to establish a mechanism for refunding Value-Added Tax (VAT) to non-resident tourists, therevy enhancing the country's overall shopping and tourism experience. "We recognize the immense potential this bill holds in attracting more tourists, stimulating retail businesses, and fostering overall economic growth. The bill is set to undergo floor deliberation in the Senate within the coming weeks, with plans for industry-wide implementation slated for the first quarter of 2024," he said.
Recovering industry
Despite the challenges posed by the developing retail industry landscape, Claudio said the retail sector has seen a significant resurgence as it recovers from the effects of the Covid-19 pandemic.
"Our businesses are not only recovering but experiencing substantial growth as we reopen more stores. Customers are eagerly returning to stores and malls, reigniting vibrant shopping experiences. Notably, revenge shopping and travel have played significant roles in driving growth since last year, and our aim is to sustain this momentum and reach even higher levels of growth," he said.
He emphasized that the Philippines' GDP "will lead major Southeast Asian countries in growth this year, driven by private consumption that underpins retail trade. As oru nation has always thrived as a consumption-driven economy, these circumstances bode well for our industry."
"We must remain committed to continuous learning and enhancing our businesses," Claudio added.
The NRCE is an annual conference that offers fresh insights and opportunities within the retail industry. The 29th NRCE focuses on retail breakthroughs for future retail industry prospects, including technological advancements, shifting consumer preferences, and the dynamic global economy.