VAT on e-commerce sites to hurt consumers: solon

She also warned that aside from consumers, small-time businesses and sellers would also be directly affected by the imposition of a 12-percent VAT on popular online shopping platforms, such as Lazada and Shopee. (File Photo: rupixen/Unsplash)

MANILA – A party-list lawmaker on Friday warned against imposing a 12-percent value-added tax (VAT) on e-commerce sites as this would ultimately hurt consumers.

In a statement, Bagong Henerasyon Rep. Bernadette Herrera said the proposed VAT would be passed on to the consumers in the form of higher prices.

Herrera called the move “totally unacceptable at this time of economic uncertainty.”

She also warned that aside from consumers, small-time businesses and sellers would also be directly affected by the imposition of a 12-percent VAT on popular online shopping platforms, such as Lazada and Shopee.

“It’s not good to impose undue administrative burden associated with VAT on Lazada and Shopee, which have been of great help to small businesses and budding entrepreneurs,” Herrera said.

These online shopping platforms, she said, play a big role for consumers as the government promotes contactless transactions amid the coronavirus disease (Covid-19) pandemic.

Herrera noted that these shopping platforms have been a source of alternative livelihood for Filipinos affected by the public health crisis.

“Many of our kababayans (who) have lost their jobs due to the pandemic had to resort to selling products and services online just to make ends meet,” she said.

On Wednesday, the House of Representatives’ Ways and Means Committee approved a proposal imposing a 12-percent VAT on digital transactions in the country.

It seeks to amend Section 105 of the National Internal Revenue Code (NIRC) by taxing digital service providers that operate through online platforms.

Digital services include online licensing or software, updates and add-ons, website filters and firewalls, mobile applications, video games, and online games, and webcasts and webinars.

Also included are the provision of digital content, such as music, files, images, text, and information; online advertising spaces; electronic marketplaces; search engine services; social networks; database and hosting; and online training, among others.

Albay Rep. Joey Salceda, panel chair, said no new taxes would be imposed, as he guaranteed exemptions for small businesses.

“If your sales are below PHP3 million, you are exempt from paying or filing VAT. If your net income as a sole proprietor is below PHP250,000, you are exempt from paying and filing income taxes. So, the small Facebook online seller will not be taxed. I guarantee you,” Salceda said.

Some 77 percent of the projected revenues would come from upper-middle-income families and above, he said, adding that only 0.04 percent of all revenues from this proposal would come from the bottom 20 percent of the population.