“Kung hahabulin ng pamahalaan ang malalaking digital entrepreneurs, dapat siguraduhing hindi nito pahihirapan ang maliliit na online seller na dumidiskarte ngayon para kumita. Our revenue policies should be sensitive to the struggles of Filipinos trying to make ends meet in these difficult times.”

These were the words of Senator Risa Hontiveros today as she sought a Senate investigation into the Bureau of Internal Revenue’s (BIR) efforts to subject small-online sellers to taxation and registration requirements amid the COVID-19 pandemic.

Hontiveros filed proposed Senate Resolution No. 453, which calls on the Senate to probe the BIR’s Revenue Memorandum Circular (RMC) 60-2020 released early this month, which orders all online sellers to register with the bureau and pay due taxes. Hontiveros’ resolution also urges the BIR to suspend “until the end of the year” the said memo, which has been roundly criticized for being “ill-timed and insensitive.”

“Magulo at mahirap sundin ang BIR memo, lalo na’t paiba-iba ang sinasabi ng mga ahensiya ng pamahaalan ukol dito. It is best for everybody’s interests if the BIR suspends the implementation of the memo until December 31, 2020, while government agencies review and craft better policy guidelines on how online entrepreneurs should register or pay taxes,” Hontiveros said.

Health risks, hefty costs

She said that as presently worded, the BIR memo orders all online sellers – even those considered as “subsistence entrepreneurs” or those selling products to earn for their families’ basic daily needs – to physically troop to BIR offices and register for tax purposes.

“Magkaroon muna ng digital platform for registration. Requiring people to congregate at the BIR’s offices likewise exposes them to the health risks associated with COVID-19 and might also lead to further spreading the disease and prolonging the pandemic,” she said.

Hontiveros noted that while Malacañang has clarified that online sellers earning less than P250,000 annually are exempt from payment of income tax, government agencies have issued contradictory statements regarding the need for small online sellers to comply with BIR registration, which may cost an applicant thousands of pesos in fees.

“The DTI has claimed that online sellers are exempt from tax registration, but the BIR said before the House of Representatives that all online sellers – no matter how big or small their income – must register. Nalilito na ang publiko, at hindi biro ito dahil ang registration sa BIR ay umaabot sa P2,260 na masyadong mahal para sa maliliit na online sellers,” she said.

Comprehensive, compassionate guidelines needed

The senator, who recently hosted a discussion with small online sellers on how the BIR order will affect their livelihood, noted that online sellers are actually willing to comply with revenue policies as long as these are clear, comprehensive and un-oppressive: “Basta hindi pahirap at delikado ang registration, mabilis na susunod ang mga kababayan natin”, she remarked.

“Our revenue policies should be responsive to the difficulties faced by many Filipinos during this pandemic. Madami sa mga bagong online sellers ay nawalan ng trabaho o negosyo at ngayon ay dumidiskarte sa internet. Maliit lang ang kinikita nila, wala silang masasakyan papunta sa mga opisina ng BIR, at delikado sa kalusugan ng pamilya nila kapag lumabas sila,” Hontiveros said.

“It is only proper for the BIR to ensure that big digital businesses earning millions in profits – such as Philippine Online Gaming Operators (POGOs) – are paying proper taxes as required by law. Pero sana, huwag na pahirapan ang mga kababayan nating dumidiskarte para makakain,” she urged.

Given the record levels of unemployment – with 7.3 million Filipinos now jobless- and the shift to digital transactions due to the pandemic, Hontiveros said the government should closely monitor and afford better protections for Filipinos trying to provide for their families through selling goods and services online.

“There is insufficient official data vis-à-vis the informal online economy to guide policy, thus making it imperative that the relevant government agencies provide an update on the situation for Congress,” she said.