By Junex Doronio
MANILA — Finally, the Bureau of Internal Revenue (BIR) has imposed its plan to subject partner merchants or sellers in online platforms to only one (1) percent withholding tax.
Signed by BIR Commissioner Romeo Lumagui Jr. and and Finance Secretary Benjamin E. Diokno, Revenue Regulations No. 16-2023 imposes a 1% withholding tax on the sales made by sellers on online platforms or digital marketplaces.
Issued on December 21, 2023, RR No. 16-2023 was met by stiff opposition on Saturday (December 30) by some local retailers.
The retailers who asked not to be named said it was “unfair” because they have a 12-percent value added tax (VAT) while online sellers are subjected to only 1 percent withholding tax.
It was learned that as early as July, the BIR had floated the possibility of imposing a creditable withholding tax of 1% on one-half of the gross remittances of online platform providers to their partner sellers or merchants.
Last November 9, the Philippine Retailers Association (PRA) called on the government to raise the planned tax rate for online sellers, saying the 1-percent withholding tax being considered is “too low” to achieve this move’s purpose of ensuring a level playing field.
PRA president Roberto S. Claudio argued that owners of physical stores are subject to a 12-percent VAT while online sellers based overseas but cater to the local market are not.
But Lumagui Jr. said the plan was in its final stages and would be implemented in December after a series of consultations with the public, online platforms, and other stakeholders.
(IAmigo/MNM)