A FORMER government official has expressed concern as to how the Bureau of Internal Revenue’s (BIR) threat of closing unregistered online businesses can help small-time startups in the market.
Under the new regulations, online businesses that fail to register with the BIR could face suspension through closure or take-down orders affecting their websites, accounts, or platforms.
Conti, who is a former DOTr spokesman and former officer-in-charge of the Maritime Industry Authority, acknowledged that “the Internet Transaction Act of 2023, coupled with the BIR’s enforcement, aims to level the playing field between online and brick-and-mortar businesses, which is essential for consumer protection and trust in e-commerce.”
He said, though, that while the regulation seeks to ensure fair taxation across physical and digital platforms, there is a growing concern that many unregistered online sellers may be driven out of business.
He stressed that “it is critical for the government to offer concrete support to startups and small online businesses, many of which lack the resources to register and comply with tax obligations.”
He also underscored the need for a more inclusive approach where the government actively helps startups transition into the formal economy.
“In other countries like Singapore and the United States, startups receive government assistance through grants, tax breaks, and legal guidance to encourage compliance. The Philippines should adopt a similar model to help our small businesses grow rather than penalizing them prematurely,” Conti said.
CLICK party-list, which advocates for innovation and digital inclusivity, is urging the government to create programs that simplify the registration process for small online sellers. These programs could include offering registration fee exemptions for the first year, providing access to free or low-cost legal advice, and setting up mentorship initiatives to guide startups through compliance requirements.
“With the BIR now closely monitoring platforms like Lazada, Shopee, and TikTok to ensure sellers are registered, it is essential that we find a balance. CLICK party-list fully supports fair taxation, but we must also ensure that our small entrepreneurs are not left behind. The digital economy thrives on innovation, and by supporting our startups, we help them scale into legitimate, tax-paying enterprises,” Conti said.
