Philippines studying ways to track, and tax, online sales

MANILA, Philippines — The Duterte administration has ordered the taxman to study how other countries impose levies on digital transactions as the government seeks to cash in on an online selling craze fueled by the pandemic.

The Bureau of Internal Revenue (BIR) will form a unit that will track sales of goods and services online, the Department of Finance said in a statement on Tuesday.

BIR Commissioner Caesar Dulay said the bureau tapped its National Investigation Division to determine how this plan will be done. At the same time, the BIR will consult with their counterparts in Russia or Korea, to find out how to properly and effectively tax digital transactions. 

“We have to catch up with these guys,” Finance Secretary Carlos Dominguez III was quoted as saying by the DOF.

A recent survey conducted by tech giant Amazon revealed that the percentage of online sellers in the Philippines was at 70%, the highest in Southeast Asia. While e-commerce is relatively new in the Philippines, Amazon said the industry is gaining popularity at a time brick-and-mortar businesses are closing shop due to the pandemic and moving online to earn a living. 

Last year, BIR released a memo reminding online businesses that by law, they are required to pay sales and income taxes. The bureau is the national government’s biggest revenue-raising agency, accounting for 80% of annual tax revenues.

Apart from online vendors, social media “influencers” earning from their content on the Internet also caught the attention of the cash-strapped government.  Earlier, the BIR said  it will investigate an initial list of 250 internet personalities to check if they have been paying their taxes.