SEVERAL sellers online in Davao City expressed concern over the recent decision of the Bureau of Internal Revenue (BIR) to impose taxes on online sellers, saying it will be a huge cut from their already meager income.
On Wednesday, June 11, BIR released Revenue Memorandum Circular 60-2020, noting the Obligations of Persons Conducting Business Transactions Through Any Forms of Electronic Media, and Notice to Unregistered Businesses.
The circular ordered "all persons doing business and earning income in any manner or form, especially those into digital transactions through the use of any electronic platforms and media, and other digital means" to register with the BIR.
Aside from that, partner sellers or merchants, payment gateways, delivery channels, internet service providers, and other facilitators must be registered with the BIR.
The tax agency also added that for businesses done online to be compliant with the tax code, it should issue proper receipts or invoices, keep a book of accounts, and file and pay tax returns on time.
Meryl Suril, who earns roughly 200 per day selling desserts through Facebook, said their income will definitely go to taxes, especially the resellers.
Riza Raboy shared Suril's sentiments, saying she only earns an average of P2,000 to P3,000 in a month.
"Dili jud okay ang naay tax labi na sa mga ginagmay na mga seller kay gamay ra kaayo og income ang online selling compared sa mga big businesses. Pila lang intawon ilang ginansya ana P5 or P10 pesos (It is not okay because we only earn less compared to big businesses)," she said.
Under Tax Reform for Acceleration and Inclusion (Train) law, all income from P250,000 and below is exempted from tax.
It also provided that micro, small, and medium businesses with gross sales below P3 million may pay a flat tax of 8 percent.
However, some online sellers were also concerned about the expenses in securing a business permit which includes processing of BIR registration.
"Wala lagi tax ang below P250,000 na income, pero ang pagprocess? Monthly ka mu-file sa BIR, zero ang tax pero ang pagprocess, gasto (We will not be paying tax but we will spend more on the processing of the registration)," online seller Roanne Hidalgo-Suelto said.
Jessa Sumagaysay, who already registered her online business since 2012, said she has spent about P10,000 to get through the process during that time.
She said fees right now could have gone up from 2012.
Sumagaysay added that her peers who are also engaged online are concerned with the one-time payment for the permits.
"Katong uban man gud, kasabot sila nga ang purpose sa Circular para maregister sila pero dili sila ganahan sa thought nga magsingil pa nga wala na gani sila kitaon like P20 to P25 ang charges nila every item tapos muregister pa sila which is very hassle plus dako siya nga imong iinvest muadto didto (Some of them understand the purpose of the Circular but they find the expense in registration challenging especially since they have no income yet)," she said.
She said that before the online sellers register with the BIR, they have to first process the business name certificate from the Department of Trade and Industry (DTI) and a business permit from the City Mayor's Office.
The BIR circular noted that "online sellers must also register their businesses or update their existing business registration not later than July 31, 2020, otherwise they will incur penalty for late registration."
"All those who will be found later doing business without complying with the registration or updating of requirements, and those who failed to declare past due taxes or unpaid taxes shall be imposed with the applicable penalties under the law and existing revenue rules and regulations," it read.
However, Sumagaysay said being registered made her confident selling online.
"I am grounded and protected by the law. We are freer to do business on any platform, online or not. Since we are acknowledged, it is easier for us to gain trust from partners, suppliers, and buyers," she said.
Davao City Chamber of Commerce and Industry Inc. (DCCCII) president John Carlo B. Tria said being registered with the government allows online sellers to avail loans from the banks.
"The advantage of getting registered is that they are able to obtain legal documents and ITRs (income tax returns) that will allow them to apply for loans. Most banks require ITR so that means you need to register," he said.
"Many online sellers are already established businesses so going online is not a problem. I believe in Davao [City], nag jump ang nanguha ug registration in May (There is a jump in the number of registrations in May)," he added.