BIR urged to reconsider plan to impose 1% withholding tax on online sellers

MANILA, Philippines – A consumer group is calling on the Bureau of Internal Revenue (BIR) to reconsider its plan of imposing a creditable withholding tax of 1% on one-half of the gross remittances of online platform providers to their partner sellers or merchants.

According to the United Filipino Consumers and Commuters (UFCC), the proposed policy by the BIR is a heavy blow to the ordinary Filipino people, who will suffer the effects of the new tax.

“Hindi pa po tayo tuluyang nakakabangon mula sa pagkakasadlak ng ekonomiya dulot ng pandemya. Patuloy na naghihirap ang mga kababayan natin dahil sa sunod-sunod na pagtaas ng presyo ng mga pangunahing bilihin, gasolina, kuryente, at iba pa,” UFCC President Rodolfo Javellana, Jr. said in a statement. 

“At a time when the country has yet to recover from the crippling effects of the COVID-19 pandemic fully, introducing new taxes that will ultimately hurt the poor is the last thing the country needs right now. Naghihirap ang taumbayan, huwag na sanang dagdagan pa ng pamahalaan,” said Javellana.

“We are concerned that the plan to have the new 1% withholding tax will be the beginning of more taxes to be imposed upon the already suffering public. It has already been reported that the Department of Finance (DOF) plans to introduce new and higher taxes in 2024,” he added. 

“We appeal to President Marcos to be on the side of the ordinary Filipinos in our crusade against new anti-poor tax measures. Naniniwala po kaming tutuparin ninyo ang inyong pangako na hindi kayo pabor sa pagpataw ng mga panibagong buwis na magpapahirap sa mamamayan at sa halip ay tututukan ng inyong administrasyon ang paglaban sa graft and corruption kasabay ng pagsulong ng efficient revenue collection.Inaasahan po ng publiko ang inyong tulong sa bagay na ito, Pangulong Marcos. Sana po pakinggan kayo ng DOF at ang BIR,” he said.

The UFCC head said his group hopes that the BIR will not push through with the planned 1% withholding tax. He said the welfare of hardworking Filipinos making a living as riders, freelancers and online sellers, as well as Micro, Small, and Medium Enterprises (MSMEs) — which are considered the backbone of the Philippine economy that provides livelihood to thousands of workers — are at stake. 

“Kaakibat po natin sa pagbangon ang sektor na ito. Sa halip na karagdagang buwis, suporta mula sa pamahalaan ang kanilang kailangan. Sa bandang huli, it will be the buying public who will bear the brunt of these new taxes,” said Javellana.

Javellana added that his group UFCC calls on the online selling/services platform providers to be the voice of their partner sellers and merchants in their representation to the BIR, which, he said, should conduct a public hearing on the matter.