Philippines investigates ways to track and tax online sales

Ramon Royandoyan –

October 26, 2021 | 3:49 p.m.

MANILA, Philippines – The Duterte administration has ordered the tax authorities to investigate how other countries are imposing taxes on digital transactions as the government seeks to cash in on an online shopping craze fueled by the pandemic.

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

BIR commissioner Caesar Dulay said the office had appealed to its National Investigations Division to determine how this plan would be implemented. At the same time, the BIR will consult with its counterparts in Russia or Korea on how to properly and efficiently tax digital transactions.

“We have to catch up with these guys,” said finance secretary Carlos Dominguez III, as quoted by the DOF.

A recent survey by tech giant Amazon found the percentage of online sellers in the Philippines to be 70%, the highest in Southeast Asia. While e-commerce is relatively new to the Philippines, Amazon said the industry was growing in popularity at a time when physical businesses were shutting down due to the pandemic and going online for a living.

Last year, the BIR issued a memo reminding online businesses that they are required by law to pay sales and income taxes. The office is the largest national government revenue collection agency, accounting for 80% of annual tax revenue.

Besides online sellers, social media “influencers” who profit from their internet content have also caught the attention of the cash-strapped government. Earlier, the BIR said it would investigate an initial list of 250 internet personalities to verify whether they have paid their taxes.

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David A. Albanese