A former government official expressed concern as to the impact of the Bureau of Internal Revenue’s (BIR) threat to close down unregistered online businesses on small-time startups in the said market.
Nick Conti, convenor of the CLICK party-list and CEO of Capstone-Intel Corp., said they are looking at how the BIR’s recent statement regarding the possible suspension of unregistered online businesses under Revenue Regulations No. 15-2024 can potentially kill small online sellers.
“The Internet Transaction Act of 2023, coupled with the BIR’s enforcement, aims to level the playing field between online and brick-and-mortar businesses, which is essential for consumer protection and trust in e-commerce,” said Conti, a former Transportation department spokesman and former officer-in-charge of the Maritime Industry Authority.
“However, it is critical for the government to offer concrete support to startups and small online businesses, many of which lack the resources to register and comply with tax obligations,” he added.
Under the new regulations, online businesses that fail to register with the BIR could face suspension through closure or take-down orders.
Conti said while the regulation seeks to ensure fair taxation across physical and digital platforms, there is growing concern that many unregistered online sellers may be driven out of business.
He also emphasized the need for a more inclusive approach, where the government actively helps startups transition into the formal economy.
“In other countries like Singapore and the United States, startups receive government assistance through grants, tax breaks, and legal guidance to encourage compliance. The Philippines should adopt a similar model to help our small businesses grow rather than penalizing them prematurely,” he added.
CLICK party-list, which advocates for innovation and digital inclusivity, urged the government to create programs that simplify the registration process for small online sellers.
These programs could include offering registration fee exemptions for the first year, providing access to free or low-cost legal advice, and setting up mentorship initiatives to guide startups through compliance requirements.
“With the BIR now closely monitoring platforms like Lazada, Shopee, and TikTok to ensure sellers are registered, it is essential that we find a balance. CLICK party-list fully supports fair taxation, but we must also ensure that our small entrepreneurs are not left behind. The digital economy thrives on innovation, and by supporting our startups, we help them scale into legitimate, tax-paying enterprises,” Conti said.
