MANILA: The Bureau of Internal Revenue (BIR) on Tuesday said electronic marketplace operators are now imposing withholding tax on sellers or merchants. "Electronic marketplace operators will begin imposing withholding tax against their sellers/merchants starting July 15, 2024. We have already extended this by 90 days. No further extensions will be given," BIR Commissioner Romeo Lumagui Jr. said in a news release. In December last year, the BIR issued Revenue Regulation 16-2023 requiring online merchants with earnings of more than PHP500,000 annually to be subjected to a one percent withholding tax. The withholding tax will apply to half of the gross remittances by electronic marketplace operators and digital financial services providers of sellers or merchants for the goods or services sold through their platforms. BIR Revenue Memorandum Circular 55-2024 provided a 90-day extension to allow affected parties to adjust to the imposition of the withholding tax. According to the BIR, the extension was grante d in recognition of the compliance needed with the relative policies or requirements of other government agencies and to give the affected parties timr to adjust. "Withholding tax is not a new tax. It's merely a system of taxation where taxes are collected at source, which will be credited against the total income tax liability of the sellers/merchants," Lumagui said. He said the BIR aims to level the playing field between brick-and-mortar stores, which are regularly complying with their tax obligations, and online market places. "Whether their business is operated online or through physical stores, sellers and merchants have to pay their taxes," he said. Source: Philippines News Agency