Requiring online sellers to register counterproductive, unrealistic, says consumer group


The Nationwide Association of Consumers Inc. (NACI) said Thursday the plan of the Bureau of Internal Revenue to require online sellers to register to ensure tax compliance will be counterproductive and unrealistic.

"Requirements such as the one issued by BIR lately for e-commerce companies will prove to be counterproductive and unrealistic especially for small e-commerce businesses," NACI assistant secretary Neva Talladen said during the virtual meeting of the House committee on trade and industry.

The committee discussed House Bill 6122, or the proposed "Internet Transactions Act," aiming to regulate the e-commerce industry in the country.

The Bureau of Internal Revenue Memorandum Circular No. 60-2020 states that "all persons doing business and earning income in any manner or form, specifically those who are into digital transactions through the use of any electronic platforms and media, and other digital means," shall register to ensure that they are tax compliant.

Talladen instead suggested to incentivize e-commerce registration and taxation, but give easier and lesser requirements for single proprietor entrepreneurs in e-commerce especially for those who are just starting out with their businesses.

She also proposed to establish an official national e-commerce platform which small-time online entrepreneurs may use as a marketplace.

"The platform may automatically get a service fee and will invoice entrepreneurs for their appropriate monthly, quarterly, and yearly tax payments which the platform can remit to BIR on behalf of the online entrepreneurs. This way, collection will be more accurate and efficient," she added.

At the same time, Talladen also suggested to require online entrepreneurs to submit their escalation and resolution process for customer complaints.


"E-commerce without clear and transparent process on their website may be flagged and called for review. Non-compliance after a certain number of issued written warnings from DTI may result in sanctions or fines," she said.

Talladen also proposed to set up a third-party survey site or seller e-commerce review platform through which consumers may give feedback on their transactions.

The Department of Trade and Industry may publish a monthly online meter board showing the best-reviewed e-commerce platforms based on the survey site, she added.

Talladen said the e-commerce industry in the Philippines may not be regulated the same way as "brick and mortar" businesses with physical stores.

She said brick and mortar businesses, although similar to their e-commerce counterparts in the sense that there is an exchange of goods and products, have physical stores, making it easier for the government to monitor and regulate them.

"E-commerce, with all the available avenues, transact including or through the use of free chat groups and social media, and with the jurisdiction of these companies based globally, they cannot be regulated in the same way," she said.

"Bigger e-commerce companies may be compliant and will be open to regulation but the thousands of e-commerce entrepreneurs existing in the country right now in an informal capacity will not find enough of an incentive to comply when monitoring them completely will not be possible," she added.

Talladen added that regulating the e-commerce industry in the country will only result in a "growing underground economy and more lost tax revenue for the country.”—AOL, GMA News