The Bureau of Internal Revenue (BIR) aims to impose a withholding tax of 1 percent from online sellers by December or January next year to cash in on the ever-growing e-commerce industry in the Philippines.
In a press conference Friday, BIR Commissioner Romeo Lumagui, Jr. said they are now in the final phase of drafting the new revenue regulation after consulting with online platforms that people use to sell goods and services and with online payment channels.
Once released, the new regulation would impose a withholding tax of 1 percent on one-half of the gross remittances of the online platform providers to their partner sellers or merchants.
“The buyer pays the platform. The platform pays the seller. So, before the platform remits to the seller how much he should get, less his commission, the platform should withhold 1 percent of one-half of the revenue,” explained Lumagui.
The online platforms and payment channels would then pay the taxes to the BIR, he added.
Lumagui also noted that the withheld tax would be creditable.
But the BIR assured small online businesses that that withholding tax will not apply if the annual total gross remittance to an online merchant for the past taxable year has not exceeded P250,000.