Sen. Risa Hontiveros said on Tuesday, June 23, she is seeking a Senate investigation into the Bureau of Internal Revenue’s (BIR) efforts to subject small-online sellers to taxation and registration requirements amid the Covid-19 pandemic.
Hontiveros filed proposed Senate Resolution No. 453, which calls on the Senate to probe the BIR’s Revenue Memorandum Circular (RMC) 60-2020 released early this month, which orders all online sellers to register with the bureau and pay due taxes.
Hontiveros’ resolution also urges the BIR to suspend “until the end of the year” the said memo, which has been roundly criticized for being “ill-timed and insensitive.”
“Magulo at mahirap sundin ang BIR memo, lalo na’t paiba-iba ang sinasabi ng mga ahensiya ng pamahaalan ukol dito. It is best for everybody’s interests if the BIR suspends the implementation of the memo until December 31, 2020, while government agencies review and craft better policy guidelines on how online entrepreneurs should register or pay taxes,” Hontiveros said.
She said that as presently worded, the BIR memo orders all online sellers — even those considered as “subsistence entrepreneurs” or those selling products to earn for their families’ basic daily needs — to physically troop to BIR offices and register for tax purposes.
“Magkaroon muna ng digital platform for registration. Requiring people to congregate at the BIR’s offices likewise exposes them to the health risks associated with Covid-19 and might also lead to further spreading the disease and prolonging the pandemic,” she said.
Hontiveros noted that while Malacañang has clarified that online sellers earning less than P250,000 annually are exempt from payment of income tax, government agencies have issued contradictory statements regarding the need for small online sellers to comply with BIR registration, which may cost an applicant thousands of pesos in fees.
“The DTI has claimed that online sellers are exempt from tax registration, but the BIR said before the House of Representatives that all online sellers — no matter how big or small their income — must register. Nalilito na ang publiko, at hindi biro ito dahil ang registration sa BIR ay umaabot sa P2,260 na masyadong mahal para sa maliliit na online sellers,” she said.
“Our revenue policies should be responsive to the difficulties faced by many Filipinos during this pandemic. Madami sa mga bagong online sellers ay nawalan ng trabaho o negosyo at ngayon ay dumidiskarte sa Internet. Maliit lang ang kinikita nila, wala silang masasakyan papunta sa mga opisina ng BIR, at delikado sa kalusugan ng pamilya nila kapag lumabas sila,” Hontiveros said.
“It is only proper for the BIR to ensure that big digital businesses earning millions in profits — such as Philippine Online Gaming Operators (POGOs) — are paying proper taxes as required by law. Pero sana, huwag na pahirapan ang mga kababayan nating dumidiskarte para makakain,” she urged.
For his part, Sen. Sherwin Gatchalian has prodded the government to extend fresh capital and other financial assistance to budding online entrepreneurs, instead of slapping them with untimely new taxes.
Gatchalian said online sellers should be covered by the microfinancing program of the Small Business Corporation (SB Corp.), a Government-Owned and Controlled Corporation (GOCC) attached to the Department of Trade and Industry (DTI), to assist them in growing their business to recover from the economic effects of the pandemic.
SB Corp., under the guidance of the DTI, has set up a P1 billion Enterprise Rehabilitation Financing facility under the “Pondo sa Pagbabago at Pag-asenso” (Covid19 P3-ERF) to support micro and small businesses affected by the economic impact of Covid-19 in the country.
SB Corp.’s microfinancing program offers a minimal interest rate of not more than 2.5% per month with no collateral requirement. Micro enterprises with asset size of not more than P3 million may borrow P10,000 up to P200,000 while small enterprises with asset size of not more than P10 million may borrow a higher loan amount but will not exceed P500,000.
“Ang DTI ay dapat magbigay pa nga ng puhunan sa mga Pilipino na nawalan ng trabaho at gustong makaahon sa kahirapan sa pamamagitan ng pagnenegosyo sa online. Sa ganitong panahon ng pandemya, mas magandang nasa tahanan lang sila at nag-nenegosyo. Nabibigyan pa nila ng trabaho ang mga delivery service riders.” Gatchalian said.
Gatchalian has openly criticized the BIR’s pronouncement of taxing online sellers, emphasizing that such move is ill-timed and insensitive. He added that registering businesses with the BIR is ineffective since its system requires an applicant’s physical presence at this time when people are still being restricted to go out of their homes.
“Nakita ko na hindi rin handa ang ating pamahalaan na buwisan ang ating mga maliliit na negosyante dahil yung ultimong pagre-rehistro ay hindi pa sila handa kaya huwag na nating ipilit sa ganitong panahon ng pandemya, dahil hindi lang marami ang naghihirap kundi marami rin ang natatakot na lumabas ng kanilang bahay,” he stressed.
Aside from providing capital, Gatchalian also urged the DTI to make use of the Philippine Innovation Law to enhance the competitiveness of these online sellers. The law aims to harness innovation efforts to help the poor, the marginalized, and MSMEs to be a part of the domestic and global supply chain.