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Bureau of Internal Revenue Commissioner Romeo D. Lumagui Jr. granted an extension of the transitory period for compliance with Revenue Regulations No. 16-2023 (RR No. 16-2023) that implements a withholding tax system on gross remittances made by electronic marketplace operators and digital financial services providers to sellers/merchants. Revenue Memorandum Circular No. 55-2024 extended the transition period by adding another 90-days for compliance, or until July 14, 2024. The extension was made after considering the private sector’s request in relation to implementing RR No. 16-2023.

“This 90-day extension of the transitory period under RR No. 16-2023 shows the BIR’s commitment in listening to the voice of the private sector. This is part of my administration’s thrust on Excellent Taxpayer Service. We hear the thoughts of the private sector, and if the same is reasonable, then we make policy adjustments for the benefit of the Filipino people,” Commissioner Lumagui stated.

RR No. 16-2023 mandates the implementation of a withholding tax system for transactions made by online sellers through electronic marketplace operators and digital financial services. This regulation was made in furtherance of the government’s effort to regulate and tax online transactions.

The online transactions industry has experienced significant growth during and after the pandemic. However, it appears that a lot of online sellers are not paying their just share in taxes. This would be unfair to brick-and-mortar stores that are regularly complying with their tax obligations.

“Ang BIR ay laging nakikinig sa opinyon ng ating mga kababayan, kasama dito ang mga online sellers at kanilang ginagamit na online platforms. Kaya inextend na ng BIR ang transitory period para bigyan ang taumbayan ng dagdag na 90 araw upang makapag-adjust sa RR No. 16-2023. Kasama sa aming Excellent Taxpayer Service ang pakikinig sa hinaing ng iba’t ibang sector ng bayan. Ito po ang Bagong BIR sa Bagong Pilipinas,” Commissioner Lumagui stated.

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