• Costlier to audit 1 million online businesses
• Better to run after Pogos that owe P70B taxes
• Zubiri says it’s “totally unnecessary”
• Malacañang standing solidly behind BIR plan
• More pyrrhic than profitable
Senator Sherwin Gatchalian, who heads the Senate’s economic affairs committee, says the government’s overarching desire to tax online businesses will be more pyrrhic than profitable.
Gatchalian, who comes from the Nationalist People’s Coalition (NPC), said Malacanang’s finance managers would do well to take a second look at the Bureau of Internal Revenue’s plan to require an estimated 1 million web-based merchants to register and pay taxes as it could be a “losing proposition.”
In other words, the government might end up spending more in administrative and manpower costs to audit sales of online sellers vis a vis expected revenues.
Malacanang is reportedly standing solidly behind the BIR’s new tax thrust to help fund its Covid19 response programs.
(Revenue officials quickly clarified however that those businesses earning below P250, 000 yearly will be spared the taxman’s noose. The ones being targeted are such big online platforms like Netflix, Amazon and Alibaba which are “getting away with murder.”)
The BIR had earlier directed internet sellers to register, declare previous transactions and pay taxes by July 31, as the coronavirus lockdown turned them into overnight sensations when traditional brick and mortar establishments were forced to shutter.
Gatchalian was quoted as saying “this is the height of insensitivity” as the majority of e-sellers are ordinary people who had been disenfranchised due to the choking pandemic restrictions enforced by the IATF to curb the Covid spread.
Better still, Gatchalian said the BIR should devote its time to running after online Chinese-owned Philippine offshore gaming operators (Pogos) who allegedly owe some P70 billion in unpaid taxes.
Administration Senator Juan Miguel Zubiri said that aside from being insensitive, the BIR directive is also “totally unnecessary.”
“Why make small enterprises suffer from taxation while Pogos are permitted to operate even if they evade paying taxes,” Zubiri was quoted in the papers as saying.