Online sellers earning below P250k a year need not pay taxes –Palace

Individuals who do business online need not pay taxes if their net income is less than P250,000 a year, Malacañang said Thursday, a statement backed by the National Economic Development Authority (NEDA).

“Maliwanag po iyan na kapag less than P250,000 ang net income, wala po kayong babayaran [na tax] kaya magrehistro na po kayo,” presidential spokesperson Harry Roque said at a briefing.

At the same briefing, acting NEDA secretary Karl Kendrick Chua said: "Kung less than P250,000 annually po ang net income, exempted po ‘yan sa pagbabayad ng tax."

The two were referring to a provision under the existing Tax Reform law.

In a controversial move, the Bureau of Internal Revenue (BIR), through Memorandum Circular No. 60-2020, is now requiring those conducting business transactions through digital or electronic means to register with the taxman to ensure tax compliance.

The order also covers partner sellers or merchants, as well as stakeholders such as payment gateways, delivery channels, internet service providers, and other facilitators.

Many individuals have resorted to online-based selling of products, mainly essentials, as a result of the lockdown imposed by the government to prevent COVID-19 transmission.

The lockdown prohibited mass transportation and mass gathering, resulting in work stoppages in many industries. It also left 7.3 million Filipino unemployed, a record high number according to the Philippine Statistics Authority.

As a result of this development, complaints from consumers involving business transactions made online have dramatically increased in the first five months of the year, according to the Department of Trade and Industry.

According to DTI data, total online complaints received increased to 9,044 in the January to May period from 2,457 last year.

DTI data also showed that for April to May — the peak of the enhanced community quarantine — total online complaints reached 8,059 from only 985 from January to March.

The government has eased quarantine measures since June 1 to allow 75% of the workforce of each company to physically report back to work and resumption of 10% to 50% of mass transport.  --KBK, GMA News