Connect with us

Hi, what are you looking for?

Economy

Gov’t told to expand digital tax foothold

THE government should look at digital payment systems that can cover cross-border transactions to widen its digital tax base, according to the National Tax Research Center (NTRC).

Long-standing issues such as poor internet connection and the lack of infrastructure should also be addressed, the state think tank said in a recent study.

The center urged the country’s tax agencies to maximize the use of digital payment systems because they are proven to be an effective tool to make online transactions more efficient. Faster tax collection could also help the country’s economic recovery, it added.

“Many countries have already adopted a progressive movement of taxing digital transactions to capture the fast-growing digital economy and level the playing field,” according to the study.

“Payment systems have the potential to help tax authorities in monitoring tax compliance and enforcing tax rules,”  it added.

The Finance department in May said it would study how to plug potential value-added tax (VAT) leakages on goods and services sold online, including cross-border transactions. House Bill 6765 or the Digital Economy Taxation Act was filed seeking to impose a 12% VAT on online transactions.

Aside from the public’s lukewarm attitude toward digital payments and the lack of a reliable and secure payment infrastructure, there’s also a need to ensure the efficient implementation of payment systems involving cross-border online transactions, the NTRC said.

The adoption of digital payments has been slow because many Filipinos think cash is still the fastest and safest way to pay, the agency said, citing past studies.

It said most countries that impose VAT or its equivalent on cross-border digital services do not require foreign companies to establish a physical office in the country where they sell, though some do have a representative office.

The Bureau of Internal Revenue issued a memo in June reminding online businesses to register with the agency for tax purposes. More than 7,000 businesses have registered as of the Sept. 30 deadline.

“During the COVID-19 pandemic, the digital transformation of BIR’s digital services has become crucial to ensure the safety of taxpayers from the threat of the virus,” it said.

“With lower revenue expectations due to the COVID-19 pandemic, the increased use of digital technologies along with strong macroeconomic fundamentals can help the government quickly return to high growth once the health crisis is over,” it added.

Tax revenues dropped by 11.28% to P1.854 trillion in the nine months through September due to weak consumer spending and business closures during the pandemic.

The tax agency also aims to start the pilot of its electronic receipts and e-invoicing system next year.

Online payment transactions of the government accounted for 59% of 472 million digital payments done, while individuals and businesses accounted for 9% and 4%, respectively, the NTRC said, citing estimates by the Better than Cash Alliance last year.

Total digital payments remained low, accounting for only 8% of the total monthly volume of payments made nationwide.

The center said there were 98 operators of payment systems registered with the Philippine central bank, while 25 others have provisional licenses. — Beatrice M. Laforga

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.
Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

Latest

Economy

WASHINGTON D.C. — The United States is seeking to form a coalition of countries to drive negotiations on a global plastic pollution treaty, weeks...

Economy

By Diego Gabriel C. Robles  THE WORLD BANK (WB) upgraded its growth forecast for the Philippines for this year and 2023, citing an “accommodative”...

Economy

THE PHILIPPINE auto industry’s sales recovery will likely be derailed if a measure reimposing excise taxes on pickup trucks is signed into law, according...

Economy

THE BANGKO SENTRAL ng Pilipinas (BSP) may deliver a second off-cycle rate hike in early November when the US Federal Reserve is expected to...

Economy

THE ASIAN Development Bank (ADB) is planning to allocate at least $14 billion for a program aimed at easing a food crisis in the...

Investing

With the reversal of the 1.25% rise in National Insurance Contributions happening on the 6th of November, employers across the nation have an opportunity...

You May Also Like

Investing

Having a good Instagram marketing agency to back up your Instagram account is an absolute must going into the new year. With competition stronger...

Investing

The minute that any question pops into your head, you can simply ask Google. No longer do we have to pour over books and...

Investing

Insomnia is the most common sleep disorder in the global population. Therefore, it is a problem that many people suffer or have suffered throughout...

Economy

Ivermectin, an existing drug against parasites including head lice, has had a checkered history when it comes to treating COVID-19. The bulk of studies...

Disclaimer: SmartRetirementReport.com, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2021 SmartRetirementReport. All Rights Reserved.