Toral: Tax tools for online professionals and merchants

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Tuesday, March 11, 2014

THE past week has been chaotic on the issue of taxes. Although the Bureau of Internal Revenue (BIR) wants to implement its standard operating procedure for businesses, including small and seasonal merchants, there is a need for BIR to adapt to present times and review its process.

For example, If BIR wants to collect from online professionals and seasonal online entrepreneurs, it should make available an electronic registration and “electronic official receipt” application that anyone can use.

It should accept the fact that these operations are virtual, where the process of business registration for brick-and-mortar establishments will not necessarily work for people online. This is especially the case for most of us who get seasonal types of jobs and businesses where there is no clear certainty if what you are doing right now will be sustainable.


It is unfair to impose and threaten people in the online space when the BIR is not willing to provide the necessary tools and processes adjusted to this type of businesses or transactions. For one, they need to provide an electronic official receipt application and process that merchants can use, where they will be advised on tax filing / payments that need to be done.

Similar to what they have now at, the application form should already be available and an official receipt tool should already be used upon approval. It will be helpful if electronic filing can also be made on the same site and users can be properly informed on tax schedules (that part of the site is not working as of this writing).

Their business-to-business tax process on expanded withholding tax deductions to merchants and service providers is also tedious. If ordinary entrepreneurs are already having a hard time coping with the tax requirements, giving them the responsibility to pay the taxes of their suppliers and service provider is an additional chore with no clear benefit for doing it.

The progressive (or aggressive depending on how you look at it) culture of fair taxation needs to be supplemented by software tools, online education and consultation, where the intent is to help small business be knowledgeable and compliant.

Furthermore, the registration in an online system should not be used as gateway for investigation of tax history and be audited as that would deter those who may not have registered in the past years for fear that they will be harassed.

I hope a simplified taxation system can happen in our generation or even the next-a system that is less prone to mistakes, misunderstanding and harassment.

Otherwise, all of this may become a deterrent to online entrepreneurship and encourage startups instead to open their business in another country with favorable tax environment. With Asean 2015, the likelihood of that will become greater in the years to come. President Benigno Aquino III has always referred to the Filipino people as “his boss.” I hope the BIR will not be perceived as a total opposite of that attitude, insofar as listening to their customer needs is concerned.


Published in the Sun.Star Cebu newspaper on March 12, 2014.


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