Marcos urges P3M in minimum transactions before online sellers must register, be taxed

Senator Imee Marcos on Thursday suggested that online sellers must make a minimum of P3 million in annual internet-assisted transactions before they should be required to be registered and taxed under the proposed Internet Transactions Act.

“I would like to recommend a threshold for transactional value at P3 million per year or P300,000 per month,” Marcos said during the Senate Committee on Trade, Commerce and Entrepreneurship hearing on the proposed Senate Bill No. 1591 or Internet Transactions Act on Thursday.

The senator argued that “stay-home moms, bartering on the sidelines and selling baked goods, would suddenly be inflicted with all kinds of registration and tax requirements” if there were no minimum cap.

Senate Bill 1591, authored by Senator Sherwin Gatchalian and Marcos, is aimed at updating the country’s regulatory environment amid evolving technological innovations and the rise in digital or online business transactions.

The bill also proposes to delineate “joint and solidary liability,” or the liability of the online e-commerce platforms and online merchants in failing to protect consumer interest, against “subsidiary liability.”

“I think it is unduly onerous. We do not impose this [joint and solidary liability] on the tiangge, sari-sari stores, then why are we inflicting it on online [sellers]? So perhaps this thing has to be considered,” Marcos said.

For his part, Gatchalian defended the inclusion of a provision in the bill on joint and solidary liability. 

“The rationale here is to make the platform responsible to the goods being sold outside of the country. A lot of these goods are beyond reach of our ordinary consumers and they have no recourse if they have bought toxicants, illegal items, and defective items,” he said.

“So just to put more responsibility and to come up with more protection for our consumers by the platform itself, we proposed that provision, the joint and solidary liability,” Gatchalian said.

Senator Pia Cayetano, however, said that “solidary accountability” is not the only way to make the online sellers or platforms accountable for violating certain rules.

“There are different reasons for different platforms. We cannot just insist on regulating all of them in the same way because they function differently,” Cayetano said.

Laban Konsyumer Inc. president Vic Dimagiba also proposed to incorporate a provision “to adopt international, regional, and bilateral agreements and other internationally agreed principles of consumer protection on cross-border electronic commerce” in the proposed bill.

The Senate panel agreed to discuss the proposals and concerns in a technical working group meeting to iron out the proposed Internet Services Act.

According to the Department of Trade and Industry, the number of complaints concerning online transactions reached 13,674 as of September 25 from only 985 in the period from January to March—before the onset of the COVID-19 pandemic.

The DTI was planning to come up with a registry of all online sellers or businesses for consumer protection purposes. — BM, GMA News