6 RETAIL NEWS CAPSULE PHILIPPINE RETAILING
Digital , traditional firms now on equal footing with online VAT
Finance Secretary Benjamin Diokno hailed the passage on third reading at the House of Representatives last Nov . 14 of a bill related to imposing the value-added tax ( VAT ) on digital transactions , saying this would level the playing field between traditional and new businesses .
Diokno said that , in particular , House Bill ( HB ) No . 4122 entitled Imposing Value-Added Tax on Digital Transactions in the Philippines , would make things fair for businesses that could not make the switch to digital .
“ It is only right that we allow our businesses to operate on even
House internet transactions bill hurdles 2nd reading
An electronic commerce ( e-commerce ) bureau will soon be created to protect consumers and merchants engaged in internet transactions as the bill proposing such hurdled second reading at the House of Representatives .
During Tuesday ' s plenary session , the chamber passed via voice vote House Bill 4 , or the proposed Internet Transactions Act , which is a priority legislation mentioned by President Ferdinand R . Marcos Jr . in his first State of the Nation Address last July 25 .
In his sponsorship speech , Batangas Representative Mario Vittorio Mariño said the bill seeks to regulate all business-to-business and business-to-consumer commercial transactions over the internet , including those related to internet retail , online travel services , digital media providers , ride hailing services and digital financial services .
The proposed e-commerce bureau will serve as the “ central authority ” tasked to regulate online trade and shall act as a virtual one-stop-shop for consumer complaints on internet transactions . ground , and this bill rightfully clarifies which digital services to tax ,” the Finance chief said in a statement .
“ It is not fair to only tax traditional businesses like restaurants and retail stores , and not tax online platforms like Netflix ,” he added .
The bill describes digital services as any service that is delivered or subscribed over the internet or other electronic networks . Such services cannot be obtained without the use of information technology and the delivery of such services may be automated . Meanwhile , digital service providers provide digital services or goods to a buyer . This may be through operating an online platform for the purpose of buying and selling goods and services or by making transactions for the provision of digital services on behalf of any person .
Diokno said HB 4122 does not impose new taxes , but clarifies the imposition of VAT on electronic or digital services such as digital advertising , subscription-based services , and other services using information communication technology-enabled infrastructure , among others . Even then , educational services such as online courses and webinars rendered by accredited private educational institutions are exempted from the imposition of VAT .
Based on Department of Finance estimates , imposing the 12-percent VAT on providers of online advertisement services and digital services , as well as supply of other electronic and online services , would generate P13.2 billion in additional revenues per year .
Philippine Daily Inquirer , 10 / 14 / 22
promoted , online transactions are secured , intellectual property rights are protected and product standards and safety are observed ," Mariño said .
He said the Internet Transactions Act shall apply to any entity , foreign or domestic , who purposefully and voluntarily directs its activities to the Philippine market , which shall be deemed as doing business in the Philippines and hence shall be subject to applicable Philippine laws . In addition , the proposed law ensures parity and respects competition between online merchants and those who offer their goods and services through brick-and-mortar establishments .
The e-commerce bureau shall take the lead in the development of online dispute resolution platforms which shall be the single-point of entry for consumers and online merchants seeking out-of-court resolution of disputes .
Likewise , the same bureau is mandated to establish , manage and maintain a registry of online businesses which shall provide consumer access to data and information of registered online business entities for purposes of verifying the validity , existence and other relevant information pertaining to business entities .
The Department of Trade and Industry shall lead in the establishment of an industry-led e-commerce trust mark to provide assurance of safety and security in internet transactions .
Philippine News Agency , 10 / 14 / 22
" No less than our Chief Executive underscored the need to enact a law which aims to establish an effective regulation of commercial activities through the internet or electronic means to ensure that consumer rights and data privacy are protected , innovation is encouraged , fair advertising practices and competition are