THE GROWTH of digital marketplaces is posing challenges for the Bureau of Internal Revenue (BIR) in collecting taxes, a legislator said on Tuesday.
The Philippine digital economy was estimated at P2.05 trillion in 2023, accounting for 8.4% of gross domestic product, according to the Philippine Statistics Authority. The equivalent totals for 2022 were 7.7% and P1.9 trillion.
“The shift to the digital economy is making it difficult for the BIR to collect taxes on the domestic economy,” Albay Rep. Jose Ma. Clemente S. Salceda, said at a committee hearing.
The BIR is in the process of digitizing its internal processes, with a focus on training employees to be digitally savvy, upgrading technology infrastructure, and improving the taxpayer experience.
It has been transitioning to digital operations after adopting a 10-year digitalization roadmap in 2019.
“This isn’t a quick fix. This digital transformation is a long process. There’s a lot that needs to be done,” BIR Commissioner Romeo D. Lumagui, Jr. told BusinessWorld.
“As of now, we are on track in developing our digital (infrastructure)… with full implementation by 2028,” he added.
At the hearing, Mr. Salceda urged the government to collect digital value-added tax on goods sold through electronic platforms.
“I don’t know who is doing the IRR (Implementing Rules and Regulations), but goods over digital markets are not being included in the definition of the digital VAT,” he said. — Kenneth Christiane L. Basilio
