Online sellers earning below P250K tax-exempt: Palace

Under Section 236 of the Tax Code, business companies are required to register once with the appropriate Revenue District Officer. (Pexels Photo)

MANILA – Online sellers earning PHP250,000 and below annually are exempted from paying taxes, Malacañang said on Thursday.

Presidential Spokesperson Harry Roque made the clarification, a day after the Bureau of Internal Revenue (BIR) directed online sellers to register their business activities, declare past transactions, and settle their taxes before July 31.

“If your online business’ net income does not exceed PHP250,000, eh wala naman talaga kayong ibabayad (you don’t have to pay taxes).

So mag-rehistro na po (You just need to register),” Roque said in a virtual presser aired on government-owned PTV-4.

In a memorandum circular issued by BIR on June 10, the agency asked all persons doing business and earning income through electronic platforms and media “to ensure that their businesses are registered pursuant to the provisions of Section 236 of the Tax Code, and that they are tax compliant.”

Under Section 236 of the Tax Code, business companies are required to register once with the appropriate Revenue District Officer.

The BIR’s latest memorandum circular covered payment gateways, delivery channels, Internet service providers, and other facilitators.

Those who fail to comply with the BIR’s directives on time will be meted with applicable penalties under the law and existing revenue rules and regulations.

Roque appealed for public understanding, saying that the latest move was meant to boost the funding for coronavirus disease 2019 (Covid-19) response.

“Ang pinagkukunan lang naman po natin ng ginagastos natin para sa Covid-19 ay yung pondo na pumapasok primarily sa BIR at saka sa Customs (Our only source of funds for Covid-19 is the BIR and Customs),” he said. “Isa po ito sa mga pamamaraan and humihingi lang po ako ng pag-intindi sa ating publiko (This is one of the solutions we’ve seen and we’re asking for public understanding).”

Roque explained that the government needs additional funds to respond to the needs of people affected by the Covid-19 pandemic.

“Kung wala naman tayong kaban sa ating bayan, wala tayong mga ayuda, wala tayong tulong na maibibigay habang naririto ang Covid-19 (If we do not have funds, we cannot provide assistance amid the Covid-19 pandemic),” he said.

Senator Risa Hontiveros questioned the BIR’s decision to tax online sellers and stressed that the bureau should instead focus on collecting the unpaid taxes of Philippine Offshore Gaming Operators (POGOs).

The partial resumption of POGOs’ operations was allowed in May in a bid to boost the government’s Covid-19 funds.

Roque ensured that taxes from POGOs are being collected to enable the government to address the Covid-19 pandemic.

“Hindi po natin sila pinapalusot. Hindi po sila pupwedeng mag-bukas nang hindi nagbabayad ng kanilang mga buwis. Trust me po, lahat po pinagkukunan natin para maibigay po natin ang pangangailangan ng mga biktima ng Covid-19 (We are not tolerating them. They cannot operate without paying their taxes. Trust me, we’re looking for other sources of funds to attend to the needs of victims of Covid-19),” he said.

The BIR is targeting to collect at least PHP2 billion a month from POGOs.