By the fourth quarter of 2023, the Bureau of Internal Revenue (BIR) wants partner-merchants of online platforms to pay a creditable withholding tax of 1%.
Early this year, the BIR suggested that one-half of the gross payments made by online platform providers to their partner sellers or merchants should be taxed at 1%.
BIR had defended the idea by saying that this wasn’t a new tax and that it was legal to collect.
In a talk with reporters on Thursday, BIR Commissioner Romeo Lumagui Jr. said, “We may start in the fourth quarter… We are aiming for this year, so it would be a full implementation next year.”
The amount that a business takes out of payments for goods or services and sends directly to the government on behalf of suppliers or workers is the withholding tax.
Lumagui said that talks with interested parties are still going on and that all ideas are being taken into account.
The United Filipino Consumers and Commuters (UFCC) had previously asked the BIR to change its plan, calling it a “heavy blow” to “regular Filipinos” who would have to pay the new tax.
The group also asked online selling and service platform providers to promote their partner sellers and merchants to the BIR.
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