THE Bureau of Internal Revenue (BIR) warns “underground economies”, including online businesses, of penalty fines and possible imprisonment if they remain unregistered and do not pay the right taxes.
During the Taxpayer’s Campaign Kickoff at the Davao Convention Center, Torres Tuesday, March 14, BIR Davao Regional Director Nuzar Balatero called these as “unlawful pursuit of business.” These are businesses which are not registered at the BIR and whose owners did not pay the annual registration fee of P500.
BIR District Offices conduct monthly Taxpayer Compliance Verification Drive in order to check and confirm the establishments and businesses that have yet to be registered. He said warning letters encouraging the owners to operate legally were already sent last year. He added if these types of businesses push through, they might file a case and if the court convicts these owners, they will be subject for imprisonment. Also, a fine ranging from P1,000 to P50,000 will be imposed.
“We evaluate these businesses. Actually, it is difficult to get and track documentations for the online business owners unless we do an entrapment operation and pretend to be buyers. And if we are not issued a receipt upon our purchase, we can use that as evidence,” said Balatero.
According to the Revenue Memorandum Circular No. 55-2013 issued by the BIR last August 5, 2013, online businesses are required “to issue registered invoice or receipt, either manually or electronically, for every sale, barter, exchange, or lease of goods and properties…and services.”
Moreover, the document requires the online businesses to remit withholding tax, final tax, tax on compensation of employees, and other withholding taxes to BIR at the time required and to issue to the concerned payees the necessary Certificate of Tax Withheld.
These online businesses include business to consumer (B2C) transactions or those online stores selling goods and services to final consumers, consumer to consumer (C2C), and business to business (B2B) which includes “job recruitment, online advertising, credit, sales, market research, technical support, procurement and different types of training”.
“We are asking help from the taxpayers to report these kinds of businesses. Whatever their experiences are with online purchasing, whether the owners issued a receipt or not, they just report it to BIR,” said Balatero.
He said this also includes small businesses like those at the market place and those offering small-scale loans or “pautang”.