THE Bureau of Internal Revenue (BIR) in Davao Region assured online sellers that enduring the process and their expenses in registering their business will be worth it.
BIR revenue district officer Abolhasan Balindong said business registration will give legal rights for them to operate their business.
"Many businessmen are hesitant to register their ventures because the process can be expensive and time-consuming. But having a legitimate business is beneficial to your company and its growth. Registration helps build customer's trust. Consumers tend to buy products from credible and trustworthy brands," he said.
"If you're engaged in business, whether small or big, registration is a must for you. By doing so, you're given the legal rights to operate your business. In a nutshell, it makes your business legit," he said.
This came after online sellers expressed concern if they will be able to afford the complying with the requirements of registering their business with their meager income as mandated by BIR Revenue Memorandum Circular 60-2020.
Some online sellers are worried about the taxes that it will incur.
Balindong explained that while online sellers will be subjected to tax as all other types of small businesses, it is possible that they will pay for their annual registration of P500.
"They are subject to Income Tax (IT) and Business Taxes, either VAT (value-added tax) or Percentage Tax. For small businesses whose gross sales do not exceed P3 million in a year, the percentage tax is applicable. They might also opt for 8 percent income tax," he said.
"For small businessmen whose income is P250,000 and below and opted for eight percent IT, they are exempt from IT and Percentage tax. However, they are still required to file income tax returns (ITRs) within the prescribed period with no payment. Basically, they only pay P500 registration fees a year," he added.
He said the BIR has taken measures to make business registration processing easier and more convenient to businessmen such as the implementation of the single-window policy.
"The BIR has issued several revenue issuances to improve frontline services and further streamline the process by introducing the implementation of a single-window policy in receiving and releasing documentary requirements for business registration. The single-window policy is implemented by establishing a counter or special lane specifically to accommodate new business registrants," he said.
On Wednesday, June 11, BIR released Revenue Memorandum Circular 60-2020, urging the registration of businesses done in electronic media.
The RMC noted 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.
It added 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."
"When your business is registered, it is visible to the records of the government. It is safe in the eyes of the tax mappers. Bear in mind that there are penalties for non-registered business. It may even lead to closure under Oplan Kandado. Worst, you may face a tax evasion case for not paying your taxes," Balindong said.