BIR Commissioner Romeo Lumagui Jr. stated that they are finalizing the rules on the proposed collection of a creditable withholding tax of 1% on half of the earnings of partner sellers or merchants by online platform providers.
Withholding tax refers to the amount that businesses deduct from suppliers or employees and directly remit to the government.
"The stakeholders, online platforms, payment channels have already... We have collated their comments, and we will issue the revised regulations that incorporate their comments. Our target is, hopefully, we can implement it by December... or at the latest January of 2024," according to the BIR chief.
To effectively collect the withholding tax from online sellers, Lumagui has advised operators of online platforms or marketplaces to ensure that their partner merchants are registered with the BIR before accrediting them as platform merchants.
Lumagui stated that this step is to ensure equal treatment between traditional businesses and those selling on digital platforms.
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Furthermore, Lumagui clarified that this is not a new tax, rather the BIR is simply seeking methods to collect taxes on digital transactions.
(Photos by Vera Victoria)
