PHILIPPINE TAX LAW ON

INTERNET COMMERCE AND ITS

EFFECTS TOWARD ECONOMIC
CONDITION
 INTRODUCTION

Economic conditions refer to the present state of the economy

in a country or region. These conditions change over time and
is influenced by numerous macroeconomic and microeconomic
factors, including monetary and fiscal policy, the state of global
economy, unemployment levels, productivity, exchange rates,
inflation and many others.
 INTRODUCTION
This study aims to determine how a nontaxable online selling affects the overall
economic condition and how it makes impact to it.

Furthermore, it also aims to answer the following:

1. What are the possible amendments on the Philippine Tax Law concerning
e-commerce businesses?
2. How do online selling business affect sellers who have physical stores?
3. How does online selling affects economic condition of our country?
BACKGROUND OF THE STUDY
 BACKGROUND OF THE STUDY
INTRODUCTION
The innovation brought about by the advancement of technology have drastically
affect how people behave and go about their daily tasks. As the number of
computer literate arises, digital individual also increases and the easier it becomes
to exchange information and facilitate remote transactions. As such, conducting
business has also become more convenient, hence, the internet has transformed
into an infinite market place where everything and anything can be bought and
sold (Consigo, 2018). These technological advances may put particular pressure on
the principles governing the taxation.
 BACKGROUND OF THE STUDY
INTRODUCTION
The e-commerce is itself a big business and that potential tax revenues are likely
to be substantial. A recent study estimates that, in 2002, state and local
governments collected $140 million in sales and use taxes from business to
consumer purchases over the internet, but were unable to collect an additional
$525 million in sales and use taxes from internet retail purchases
(Forrester Research, Inc., 2005).
 BACKGROUND OF THE STUDY
INTRODUCTION
In the Philippines, a joint report by Globe Telecom and online news portal Rappler
revealed that the penetration rate of mobile internet is growing at 150% every
year, with average users spending 3.2 hours on mobile internet, and 5.2 hours on
desktops and tablets. The same report noted that five out of 10 Filipinos recently
bought something from the internet, including games, music, apps, services and
physical goods.Like minded entrepreneurs have welcomed this digital phenomenon
with open arms, judging from the popularity of e-commerce websites such as
Lazada, Zalora, and Shoppee, which millions of pesos in sales.
 BACKGROUND OF THE STUDY
INTRODUCTION
Since these are new business platforms that were not even present a few decades
ago, the Bureau of Internal Revenue (BIR) has seen it to remind the transacting
parties of their tax obligations while keeping in mind the shared interests of the
government, that is, to ensure the proper collection of taxes from the profits
gained in the conduct of online business transactions. These policies are intended
to complement the electronic commerce act of 2000, otherwise known as republic
act 8792, BIR issued Revenue Memorandum Circular No. 055-13, which further
reiterated the taxpayers’ obligations in relation to online business transactions.
METHODOLOGY
 METHODOLOGY
An integration of different relevant methods were used to gather data as
researchers were both concerned about the statistical(numerical) and qualitative
data in the study. The researchers will be using descriptive design to obtain
information concerning the current status of online retailing and to describe
"what exists" with respect to the variables or conditions in a situation. This will
give a general overview with some valuable pointers that can be a useful tool in
developing a more focused study.
 METHODOLOGY
On the other hand, researchers will be using survey questionnaires and key
informant interviews. The survey will be conducted by providing structured
questionnaires to a number of randomly selected respondents in the University
of Mindanao whom were asked about the significance of subjecting income tax
on e-commerce business. Moreover, the interviews will be conducted on existing
business operators with physical stores which will then be serves as an
information on how the surge of online retailing affects their sales.
Overview of Alternatives
 Overview of Alternatives

1. E-commerce is a more complex form of commerce and may be covered by

existing laws of the country, the law must provide standards that will establish the
formation of e-commerce contracts that will supplement the application of the
existing laws of the country.
 Overview of Alternatives

1. E-commerce is a more complex form of commerce and may be covered by

existing laws of the country, the law must provide standards that will establish the
formation of e-commerce contracts that will supplement the application of the
existing laws of the country.
 Overview of Alternatives

3.Create Platform. One of the possible alternatives the government can do is to

create a social media platform or an application exclusively for those who want
to sell online. In this case, they can set-up a registration process for every online
seller in order for them to be regulated and government can easily impose and
implement payment for taxes.
CONCLUSION
AND RECOMMENDATION
 CONCLUSION
INTRODUCTION
Online shopping will make a significant impact in the Philippine economy
contributing a huge percentage in economic development if the rightful taxation
system on e-commerce will be implemented. Though there is already taxation laws
implemented, there is still no law that specifically discussed the taxation of
e-commerce transaction to a large extent, unregistered sellers roaming online
proves that and it is still unresolved. All these existing problems regarding
e-commerce prompt the government to make revisions and amendments in its
existing laws and other ordinances that will specifically addressed the prevailing
issues regarding e-commerce.
 RECOMMENDATION
INTRODUCTION
Government, Online Sellers and Buyers

The researchers believed that the existing rules and legislations are not
enough to solve the existing problem towards electronic commerce. Hence, the
researchers suggest that government must take consider on asking help for
professionals who are capable of detecting and identifying unregistered online
seller like our I.T. professionals.
 RECOMMENDATION
INTRODUCTION
Government, Online Sellers and Buyers
Researchers believed that this is a rigorous process to do and will keep
existing if not regulated and so it is right to recommend for the government to
provide an online platform that will be known in the country as the only legal
e-commerce application where legit and registered sellers and buyers can navigate
and do business thereon. This may take time and money, but when achieve will
surely give a perpetual benefit to cover the cost. To achieve the aforementioned
concerns, amendments to the Philippine Tax Law concerning the taxation on
e-commerce is needed.