THE Bureau of Internal Revenue (BIR) is asking online sellers of goods and services to register their activities at their office, declare their past digital-based businesses and pay their appropriate taxes before July 31, 2020. This was announced recently by the BIR in its effort to raise revenue for the government and issued Revenue Memorandum Circular No. 60-2020 last June 1, 2020.
The said office said that as per the amended tax code, those who make money through digital platforms, should ensure that their activities are registered and are tax-compliant. These include not only sellers but all other stakeholders such as those with business as payment gateways, delivery channels, internet service providers etc. For those who cannot comply with the said directive of the BIR, penalties await them for late registration.
It can be recalled that during the Enhanced Community Quarantine (ECQ) when people cannot go out to work or leisurely go places, e-commerce exploded and people are selling almost everything on-line. Because of the lockdown, people who need to buy things merely rely on merchants selling through the internet.
It is understandable for the said tax agency to generate income for the government. As it is said, taxes are the lifeblood of a nation. Since the world, including our country, is on a crisis brought about by the pandemic, governments around the globe need resources and one way to generate such is through taxes.
To the dismay of many on-line sellers and even buyers, the imposition of taxes to online business activities is said to be on a wrong timing when many people are reeling from the effects of the lockdown. At present many cannot still report to their workplaces while many have been displaced or terminated from their jobs due to the prevailing economic crisis.
In addition, many on-line sellers are simple small entrepreneurs who are forced to do business through the internet due to the then ECQ. Taxing these micro-businesses would tremendously discourage people from engaging in micro-entrepreneurship. A number of these sellers meanwhile are simply selling their personal things which they do not use anymore or out of the lack of finances, are selling their property to recuperate from their financial crisis.
Further, imposing taxes to small-scale business activities would increase the prices of the commodities being sold. Surely, on-line sellers would pass-on the taxes they will have to pay to their helpless buyers to cope up with their search for small profit.
Many are doubting as to how the BIR can effectively implement its circular since on-line business are difficult to monitor. Many of the on-line sellers are using pseudonyms or their e-business names in their transactions. Many of them do not actually use business names but their Facebook accounts in dealing with their clients.
The BIR, in its bid to tax on-line sellers, would have to tie-up with Facebook if it wants to seriously impose tax on on-line business activities. However, it is tantamount to the encroachment of the right to privacy if the said tax agency would dig in into the accounts of people and their activities.
If the said government action would push through, let's wait and see as to how successful would the efforts of the BIR in raising revenue for the government through these small business activities proliferating online.
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