THE Bureau of Immigration (BI) said that the 1 percent withholding tax that is being imposed on online sellers is not a new tax.

Likewise, the BIR said that not all sellers will be affected by the measure.

“Hindi tayo nagpapataw ng panibagong buwis. Walang bagong binabayarang buwis. Ang binabayarang buwis dito ay income tax,” BIR Commissioner Romeo Lumagui Jr. said.

He explained that “Revenue Regulations No 16” which imposes a withholding tax on gross remittances made by electronic marketplace operators and digital financial services providers to sellers/merchants for goods and services sold/paid through the former’s platform/ facility.

Lumagui also noted that it only meant that it will improve collection and likewise  encourage more small and medium-sized businesses to register. 

“Kapag kumikita po tayo, generally kailangan mag rehistro dito sa aming ahensya at kailangan magbayad ng buwis,” said Lumagui.

The said measure imposes a 1 percent creditable withholding tax on half of the gross remittances made by electronic marketplace operators and digital financial service providers to sellers or merchants. 

It usually translates to 0.5 percent of the total gross remittances.

But those who are exempted are those who have annual gross remittances not exceeding P500,000, or if the online seller is duly exempt pursuant to any existing law or treaty.

Various online shopping apps, food delivery apps, online hotel booking sites, transport service apps and other online platforms are covered by this policy.

Online selling boomed during the pandemic, with many looking online to buy items and food.