Gov’t aid for startups urged as BIR cracks down on unregistered online businesses

A local think tank on Thursday urged government support for startups amid the Bureau of Internal Revenue's warning on the possible suspension of unregistered online businesses. 

Lawyer Nicasio Conti, CEO of Capstone-Intel Corporation, expressed support for the regulation as well as concern that startups might struggle in complying with the rules. 

“The Internet Transaction Act of 2023, coupled with the BIR’s enforcement, aims to level the playing field between online and brick-and-mortar businesses, which is essential for consumer protection and trust in e-commerce,” Conti said in a press release.

“However, it is critical for the government to offer concrete support to startups and small online businesses, many of which lack the resources to register and comply with tax obligations,'' he added. 

Conti said there is a need for a ''more inclusive approach,'' in which the government could actively help startups in the transition. 

“In other countries like Singapore and the United States, startups receive government assistance through grants, tax breaks, and legal guidance to encourage compliance. The Philippines should adopt a similar model to help our small businesses grow rather than penalizing them prematurely,” he said. 

BIR Commissioner Romeo Lumagui Jr. has issued Revenue Regulations No. 15-2024 (RR No. 15-2024), which prescribes the policies of the agency in relation to the registration of brick-and-mortar stores and online businesses. 

Lumagui said that Section 8 of RR No. 15-2024 states that business operations may be suspended through the issuance of a Closure/Take Down Order against physical or online businesses. 

The closure of such business operations does not preclude the BIR from filing tax evasion cases under its Run After Tax Evaders program, he added. 

The BIR will also monitor digital platforms and e-marketplace platforms to check if their online sellers and content creators are compliant with the required registration. — BM, GMA Integrated News