Group says proposed Internet Transactions Act lacks teeth to boost e-commerce sector

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A social development organization has offered suggestions to improve the proposed Internet Transactions Act (ITA), which it said is not equipped adequately to address the problems of the local e-commerce industry.

The Bayan Academy for Social Entrepreneurship and Human Resource Development hosted an online symposium on Tuesday, February 16, to discuss the implications of the proposed legislation for the micro, small, and medium enterprises (MSMEs) in the country.

Also known as Senate Bill 1591, the bill aims to increase growth in the Philippine e-commerce sector by fostering an environment of trust between consumers and online businesses. The House version of the measure hurdled the final reading in November last year.

But in the online forum, Bayan Academy said the ITA does not address two key issues it identified — the difficulty MSMEs have in adopting e-commerce practices and the country’s weak Internet and logistics infrastructure.

The group also stressed the main worry of the micro-business owners they interviewed. Specifically, they think the amount of time, effort, and funds required for registrations and regulation compliance proposed by the bill may make it unfeasible for them to continue doing business.

Thus, the bill may not only cause current businesses to rethink continuing operations, but also discourage budding micro-entrepreneurs from starting their ventures, they said.

To address these issues, Bayan Academy presented some amendments to the ITA that would take into account the needs of MSMEs.

“We need to create an environment where consumers are protected through regulation and privacy, data, redress, as well as ensuring the legitimacy of transactions,” said John Francia, program director for the hyper upscaling business unit of Bayan Academy.

“On the other side of the coin, we need to create an environment where doing business through e-commence is convenient, easy, and readily accessible. So, we believe that e-commerce regulation should find the balance between protecting consumers and building a supportive environment for online business,” he said.

Bayan Academy first addressed the ITA’s provision on registration and regulation compliance. Instead of complete registration, the group suggested that graduated or ladderized registration be implemented on a time or revenue basis.

The revision, it said, would allow e-commerce businesses to only partially complete registrations until a period of time has passed or they have reached a certain amount of revenues.

The second recommendation covers one of the original provisions of the bill that requires publishing important business registrations online.

While important for public trust, publishing the registration information will make them vulnerable to copying, Bayan Academy said. An alternative, it urged, is for an e-commerce trust mark — which will be awarded by the government — to be integrated with business registration documents. The documents themselves will be located on the website of the Department of Trade and Industry for added security.

Next, the group recommended that the E-commerce Bureau — the regulatory body proposed by the bill that would monitor e-commerce transactions in the country – to assume a more active role. Currently, the bill would only allow the body to submit recommendations regarding e-commerce policy to government agencies.

Bayan Academy said that it should be empowered beyond simply recommending policy and actually be responsible for forming rules and regulations that would govern e-commerce transactions.

Affording this capacity to the E-commerce Bureau would allow for an agile policy-making body that is essential for development in the fast-paced e-commerce sector, it added.

Lastly, the group suggested that a portion of the taxes from e-commerce transactions should be dedicated to strengthening the country’s weak ICT infrastructure. Such funds could be utilized to improve Internet and delivery infrastructure, pursue cybersecurity initiatives, and provide digital literacy programs for consumers and MSMEs.

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