Online marketplaces like Facebook and Shopee may be shut down if unregistered online sellers are still able to sell on their platforms, Bureau of Internal Revenue (BIR) Commissioner Romeo D. Lumagui Jr. said.
Lumagui told reporters on Wednesday, July 17, that online sellers whose businesses are not registered with the BIR should not be allowed by the online marketplaces.
“‘Pag nakita natin na ang e-marketplace or ang mga platforms na yan ay pinapayagan nila magbenta ang mga online sellers na hindi registrado, ay susulatan natin din sila para masigurado na tanggalin nila yan,” he said at the sidelines of its partnership event with the Securities and Exchange Commission.
[When we see that the e-marketplace or those platforms allow online sellers who are not registered to sell, we will write to them to ensure that they remove them.]
“Kapag hindi pa rin nila tanggalin ang lahat ng mga online sellers na hindi registrado, pati sila ay pwedeng ma-shutdown at para mapatigil yung kanilang platform,” he added.
[If they still do not remove all the unregistered online sellers, they too can be shut down in order to stop their platform.]
The BIR identifies an online marketplace as a digital service platform that serves as an intermediary connecting online buyers or consumers with online sellers or merchants.
Based on BIR Revenue Regulation 16-2023, online marketplaces and digital financial services providers (DFSP) will withhold one percent income tax on one-half of their gross remittances to sellers for goods and services sold through their platform.
This rule does not apply to online sellers whose annual total gross remittances are P500,000 or lower during the last taxable year and whose cumulative gross remittances are P500,000 or lower in a taxable year.
This also includes online sellers exempt from or subject to a lower income tax rate as per any existing laws or treaties.
The bureau has already started the implementation of withholding tax by online marketplaces against online sellers on July 15, following the 90-day extension.
Meanwhile, DFSPs were granted another 90-day transitory period until Oct. 12 to adjust its system for the imposition of withholding tax.
Revenue collection
Despite not achieving its target for the first half of 2024, the BIR chief hopes that with the implementation of withholding tax, it will be able to reach the P3 trillion target for the full year.
READ MORE: BIR misses first-semester collection target by 3%
He also emphasized the bureau’s enforcement activities, such as the implementation of stamps on vape products, to boost its revenue collections this second half.
The bureau collected around P1.36 trillion from January to June this year, up by 11.7 percent compared to the P1.219 trillion collections in the same period last year.
However, it missed the target of P1.403 trillion set by the Development Budget Coordination Committee (DBCC) by three percent.