BIR Commissioner Atty. Romeo D. Lumagui, Jr.

QUEZON CITY — The Bureau of Internal Revenue (BIR) on Friday (Nov. 10) said that they are now finalizing he rules on the imposition of one percent tax on online sellers.  

In a press conference at the Philippine Information Agency (PIA) hosted by PIA Office of the Deputy Director General for Regional Operations Head Executive Assistant Venus R. Valdemoro, BIR Commissioner Atty. Romeo D. Lumagui, Jr. said “We are currently finalizing the rules, the contents of which were initially published, on the one percent tax on online sellers be it on social platforms. We are collating their comments so that they will be incorporated with the rules.”

“We value the voice of the taxpayers. Hopefully, we will be implementing the one percent tax by December or January next year at the most,” Lumagui added.

The BIR chief noted that it is difficult to estimate the amount of taxes that will be collected from online sellers because of the proliferation of online business.

“With the implementation of the monthly to quarterly VAT (value added tax), the January to September 2023 tax collection cannot just yet be made public,” Lumagui said.

With less than two months remaining before end the year 2023, the BIR chief could not just yet estimate how much of the PHP2.6-T target for 2023 would still be collected.

“As a general rule, lahat ng nagbebenta at kumikita ay kailangang magregister sa BIR. Ngayon maraming kumikita, specially during the Covid-19 pandemic, they have to be registered with the BIR,” Lumagui said.

He stressed hold that “threshold amount” is PHP250,000.00 which is not subject to tax.

“Wala bagong tax na kinocollect. Hindi po kayo mabubuwisan kung maliit na negosyo yan,” he added.

Lumagui explained that the withholding tax is not the total amount of tax, which is one percent of half of the gross revenues, which is also “advance”, for example, PHP10 million less the deductions.

Lumagui worked for seven years with the BIR before becoming BIR Deputy Commissioner in November last year and appointed BIR Commissioner in July this year.

“Digitalization of remote areas will be dependent on the infrastructure and the connectivity in the area. We have continuous coordination with different government agencies such as the DILG (Department of Interior and Local Government). E-services through the lounges in different areas, taxpayers can file their tax payments,” Lumagui said.    

The imposition of withholding tax on online business will determine how much really the online business is or the so-called “entire universe of online transactions.”

Online sellers and online platforms are both subject to tax and the BIR is in “constant communication” with the online platforms such that all the products of the online sellers pass through the online platforms, the one percent of the half of the gross revenues of the online sellers is deducted by the online platforms, who turn, remits the same to the BIR.

The BIR has temporarily closed down an establishment with a tampered Point of Sales (POS) machine system, a software which can be manipulated, such that a sales underdeclaration was made.

An employee of the BIR was also charged in connection with the same offense for his alleged involvement in the said nefarious activity. — By Perfecto T. Raymundo, Jr.