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Philippines Looks To Tax Online Traders

by Mary Swire,, Hong Kong

22 January 2013

Within its efforts to meet an increased budget in 2013, in particular from improved tax compliance, the Philippines Bureau of Internal Revenue (BIR) has indicated that it will put part of its focus on online traders and the websites that they use.

The BIR has a budget for individual income tax revenue of PHP258.14bn (USD6.34bn) in 2013, a 16.4% increase over its target last year of PHP221.77bn. While the bulk of the BIR's income taxes are paid automatically by employers from their salaried employers, most of the increase in income tax revenue is, again, expected to be obtained from increased tax compliance.

In that scenario, as it looks to widen further the Philippine tax base, the BIR is focusing not only on the regular online traders using so-called "buy and sell" websites without registering with the BIR to pay their taxes, but also on the website operators themselves, said to include eBay, Sulit and AyosDito, that allow them to do so without checking their tax credentials.

BIR Commissioner Kim Henares has confirmed recently that cases can be filed against both the sellers of the goods and also the websites that allow individuals to trade online, as the latter act in much the same way as mall operators that lease commercial space to entrepreneurs and, under the country's tax code, have to ensure that their tenants are issuing receipts and are registered with the tax authority.

She also confirmed that the BIR could move immediately against the online traders and websites under existing tax regulations which state that, for each sale of goods or service provided valued at or above PHP25, receipts have to be issued by the seller or provider.

TAGS: individuals | compliance | tax | business | tax compliance | commerce | entrepreneurs | Philippines | tax authority | internet | e-commerce | revenue statistics | regulation | retail | individual income tax

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