A three-year tax exemption period for small e-commerce enterprises will help their business grow, the Department of Trade and Industry (DTI) said Thursday.

DTI Undersecretary Ruth Castelo made this remark as she pushed anew for the passage of the proposed Internet Transactions Act, noting that it would greatly benefit small e-commerce enterprises.

Under the proposed bill, newly registered e-commerce microenterprises would be exempted from all local and national taxes for three years under specific qualifications.

“Gusto natin silang lumaki, gusto nating tulungan na makapag-umpisa sila nang maayos na mayroon silang mga permits, mayroon silang mga lisensiya from government agencies involved (We want them to grow, we want to help them start properly, that they have permits, they have licenses from government agencies involved),” she said in a Laging Handa public briefing.

Castelo acknowledged that many small e-commerce enterprises hesitate to register with the government over fears they would have to pay fees.

“Ang tendency ng mga maliliit na players natin in the online retailing, takot silang magrehistro sa kahit na anong government agency dahil takot sila sa fees (The tendency of our small players in the online retailing, they are afraid to register with any government agency because they are afraid of the fees),” she added.

She said the three-year tax exemption period is expected to encourage them to sign up.

Currently, the Tax Reform for Acceleration and Inclusion Act (TRAIN) Law exempts those with annual taxable income below PHP250,000 from paying personal income tax.

Castelo said the proposed law would complement the TRAIN Law.

“Mayroon tayong existing provisions sa TRAIN Law that the first PHP250,000 income is exempt from income tax. Pero gusto pa rin natin sana iyong mga all other taxes, mga all other permit fees ma-exempt muna sila para makapag-umpisa nang maayos (We have existing provisions in the TRAIN Law that the first PHP250,000 is exempt from income tax. But we still want all other taxes, all other permit fees to be exempted first so that we can start properly),” she said.

The proposed Internet Transactions Act will enable the growth of e-commerce in the country and support the digitalization of micro, small and medium enterprises (MSMEs).

It will also establish a regulatory framework for Internet transactions. (PNA)