BIR sees tax collection boost as online sellers start withholding

THE Bureau of Internal Revenue (BIR) expects collections to improve in the coming months as the new withholding tax on online sales takes effect.

“Collections from the withholding taxes from online sellers are expected to come in beginning November, so that will help,” BIR Commissioner Romeo D. Lumagui, Jr. told reporters on the sidelines of a forum on Wednesday. 

“In the coming weeks, we will be more aggressive in our enforcement,” he added.

The BIR had notified online sellers and merchants of their obligation to withhold starting July 15.

Mr. Lumagui did not say whether the BIR expects to hit its P3.05-trillion total collection goal for this year.

The bureau expects to collect P332.17 billion in October, P254.56 billion in November, and P210.89 billion in December.

“In terms of growth rate, we can say that collections so far have been better compared to the previous year’s collection,” he said.

According to the Treasury, the BIR’s collections as of the end of August rose 12.55% year on year to P1.92 trillion.

Mr. Lumagui cited difficulties in the collection of excise taxes due to the illicit nature of much trade.

“Many (sellers) do not have their products registered and marked with revenue stamps,” he said.

Earlier this year, the BIR required internal revenue stamps to be affixed to all vape products, as a means of easily distinguishing between legitimate and smuggled products.

The government aims to collect P326.2 billion in excise taxes this year, or around 10.68% of its overall revenue goal.

Meanwhile, the BIR estimates revenue to take a hit of more than P7 billion after the government banned the Philippine Offshore Gaming Operators (POGO) industry.

“Revenue lost due to the POGO ban will be huge, but we must also consider the industry’s social costs,” he said.

President Ferdinand R. Marcos, Jr. in July banned offshore gambling operators, citing the industry’s alleged involvement in various illegal activities.

The BIR is seeking to offset the foregone revenue by toughening enforcement elsewhere, Mr. Lumagui said. — Beatriz Marie D. Cruz