BIR to issue takedown orders vs unregistered online sellers

MANILA, Philippines — The Bureau of Internal Revenue (BIR) warned of the issuance of takedown orders against online sellers who will fail to register their businesses and pay the required withholding tax.

In a statement, BIR Commissioner Romeo Lumagui said business operations may be suspended through the issuance of closure or takedown orders against online businesses.

The BIR targets to level the playing field between physical and online stores by regulating them equally and taxing them uniformly.

Last July, the BIR formally imposed the one percent withholding tax on online platform providers.

This is one percent of one-half of the gross remittances of the online platform providers to the sellers of goods and services.

Lumagui advised electronic marketplace platforms, online sellers and content creators to follow the regulations as soon as possible.

“It is unfair to the retail industry or to sectors with brick-and-mortar stores if online businesses are not regulated and taxed in the same manner,” Lumagui said.

“If physical stores can be closed down through a closure order, online businesses can be closed down through a takedown order,” he said.

The BIR chief emphasized that the closure of such business operations does not preclude the BIR from filing tax evasion cases under its Run After Tax Evaders program.

Further, BIR regulations also provide that lessors, sub-lessors of commercial establishments and operators of digital platforms are required to ensure that all their lessees and online sellers or merchants are duly registered with the BIR.

Failure to enact or enforce internal mechanisms to prohibit the non-registration of lessees or online sellers will be considered by the BIR as an act of aiding or abetting in the commission of the offense.

Lumagui maintained that the BIR will be monitoring digital platforms and e-marketplace platforms like Lazada, Shopee and TikTok to check if their online sellers and content creators are compliant with BIR registration.