Press Release
June 17, 2020

BIR memo may still require small online sellers to spend thousands of pesos to register and avoid penalties, Senator warns

"Naging magulo para sa mga online sellers ang memo mula sa BIR. Mabuti pang bawiin, i-review, at i-rewrite muna ng ahensiya ang guidelines na nilabas nila."

This was the remark of Senator Risa Hontiveros on Wednesday as she urged the Bureau of Internal Revenue (BIR) to withdraw, review, and re-write its memorandum circular on the taxing and registration of online sellers. Revenue Memorandum Circular (RMC) 60-2020, released early this month, alarmed small online sellers and was criticized as ill-timed and insensitive.

The said circular notified all persons doing business and earning income through the use of any electronic platforms and media, and other digital means to register their businesses pursuant to Section 236 of the National Internal Revenue Code (NIRC) by July 31, 2020.

"Kung may deadline man, sana ay i-urong muna dahil nasa panahon tayo ng matinding krisis," Hontiveros urged. She added that the government should put its clarifications about the said memorandum in writing. The Senator's remarks came after the Department of Trade and Industry claimed that small online sellers or those who earn PhP 250,000 and below annually are exempted from registering their business with the BIR.

"As of today, RMC 60-2020 is still enforceable. Strictly speaking, its text still mandates all, including small online sellers, to register with the BIR," she explained. "Magandang magdeklara muna ang BIR ng moratorium sa pagpapa-register ng online sellers at bawiin muna ang mga guidelines sa ilalim ng RMC 60-2020, habang nasa panahon tayo ng krisis," the Senator said.

"The country's economic recession due to the COVID-19 pandemic is driving millions into unemployment. Many Filipinos are turning to online selling to make ends meet. We should not punish them with confusing guidelines and hefty fees," she said. She noted that the COVID-19 pandemic has left a record number of Filipinos jobless, with the Philippine Statistics Authority reporting 7.3 million unemployed adults in April.

"Dapat maging malinaw sa BIR circular ang mga exemptions para sa mga small online sellers at para sa mga nag-o-online selling bilang pantawid ngayong marami ang nawalan ng trabaho at kita," Hontiveros also said.

BIR registration may cost sellers thousands of pesos

Hontiveros also warned that the enforcement of the BIR circular may force small online sellers to pay thousands of pesos just to register and avoid penalties. She noted that although small online sellers may be exempt from paying income taxes, the said circular in effect requires them to not only physically troop to BIR offices, but also spend around 2,260 pesos to fully comply with all documentary requirements.

"If the circular is still enforced and if we are to strictly follow government policy, online sellers will have to shell out at least PhP 2,260 pesos each just to register," Hontiveros said. "DTI certification, BIR's own registration fee, and payment for printing of receipts will cost roughly 2,260 pesos in total," she added.

"May dagdag-gastos din na at least 1,500 pesos kung magpapa-imprenta ulit ng resibo. May pwedeng dagdag-gastos din sa pag-file ng financial report quarterly. Mahirap yan para sa isang small-time online seller na dapat ay may proper documentation na ang kita niya ay less than 250,000 pesos annually," Hontiveros also explained.

"Imbes na matulungan ang ating mga online sellers, mas lalo pa silang mamumulubi dahil sa laki ng gastos nila sa registration at para maiwasan ang penalties ng BIR," the Senator urged. "Sa panahon ng COVID-19 crisis at ginagawang pantawid-kita ang online selling, pahirap ang kasalukuyang requirements ng BIR sa ating mga kababayan," she said.

Protection of consumers and online sellers

The Senator said that instead of imposing new obligations that may discourage online sellers, government should promote and protect online selling as a safe and efficient means of earning income for Filipinos. "Malaki ang potensyal ng online selling makapagbigay ng kita sa mga nawalan ng trabaho. At dahil online ito at limited ang physical contact, mas ligtas ito kumpara sa mga tradisyonal na trabaho," Hontiveros explained.

Government agencies, Hontiveros said, should invest their efforts in making online selling a more secure experience for Filipinos, by addressing emerging issues like online fraud, 'joy-dibbing' and other abusive trade practices of sellers or customers alike.

POGO Revenues: 'How much, sis?'

Hontiveros reiterated her call for the government to go after Chinese-owned Philippine Offshore Gaming Operators [POGOs] and intensify efforts to collect the billions in unpaid tax obligations owed by those firms. "Unahin nilang singilin ang 50 billion pesos na reported na utang na taxes ng mga POGO, bago nila pagtuunan ng pansin ang kakarampot na kita ng mga online seller," she said.

The Senator also challenged the BIR to make public its revenue collection efforts towards POGO companies. "How much, sis? Mula sa kanilang utang na 50 billion pesos, magkano na ba ang nabayaran?" the Senator asked citing BIR's own admission last month that almost none of the POGO companies have settled their tax obligations.

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