The Bureau of Internal Revenue said Tuesday the electronic marketplaces operating in the country such as Shoppee and Lazada should start imposing withholding tax on sellers and merchants using their online platform.
Last year, the BIR required online merchants and sellers to pay one percent tax on gross receipts exceeding P500,000 a year. The taxes will automatically be withheld by online marketplaces and digital financial services providers who are required to remit to the BIR much like employers collecting income tax from their employees.
“Whether their business is operated online or through physical stores, sellers and merchants have to pay their tax.”
BIR Commissioner Romeo Lumagui Jr.
The BIR said electronic marketplace operators shall impose the withholding tax starting 15 July while digital financial services providers such as Maya and Mynt, operator of GCAsh and Fuse, were given until 12 October to impose the tax to allow them to complete their system adjustments.
BIR Commissioner Romeo Lumagui Jr. said the imposition of the withholding tax is aimed at leveling the playing field among merchants.
“Whether their business is operated online or through physical stores, sellers and merchants have to pay their tax,” said Lumagui in a statement.
The International Trade Administration of the US Department of Commerce earlier estimated the value of the Philippines’ e-commerce market to hit USD24 billion in 2025 from USD17 billion in 2021.
