THE Philippine Retailers Association (PRA) said it supports a tax on online merchants to ensure that the bricks-and-mortar segment of the industry enjoys fair competition.
PRA President Roberto S. Claudio said in a speech at the opening of the National Retail Conference & Expo (NRCE) in Pasay City on Thursday that the organization is pushing for a “more equitable landscape” and supports a bill seeking to collect value-added tax (VAT) from digital service providers.
“The PRA stands firmly behind the proposed internet taxation law through Senate Bill (SB) 250… We firmly believe that this bill will pave the way for a more equitable business landscape in the Philippine retail industry, benefiting both local and international online players,” Mr. Claudio said.
“One significant challenge we face is the unlevel playing field created by online foreign merchants. Ensuring that online retailers adhere to the same laws and ordinances that traditional stores abide by is crucial,” he added.
SB 250 seeks to clarify the rules on VAT collection from digital service providers, which are being required to help the government collect VAT from their users.
“Matters such as taxation, duties, product standards, intellectual property, price tags, official receipts, and truth in advertising among others, must be upheld consistently across all online marketplaces. Addressing this concern is of paramount importance to our retail community,” Mr. Claudio said.
Mr. Claudio noted that the retail industry has seen a “significant resurgence” throughout the year from so-called revenge shopping.
“Our businesses are not only recovering but experiencing substantial growth as we reopen more stores. Customers are eagerly returning to stores and malls, reigniting vibrant shopping experiences,” Mr. Claudio said.
“Notably, revenge shopping and travel have played significant roles in driving growth since last year, and our aim is to sustain this momentum and reach even higher levels of growth,” he added.
Mr. Claudio said the PRA supports the bill making foreign tourists eligible for VAT refunds. Such visitors currently pay the 12% VAT on goods and services.
On March 6, the House of Representatives approved House Bill No. 7292 on third and final reading. If signed into law, the measure would authorize VAT refunds for foreign tourists with purchases worth at least P3,000.
“This crucial legislation seeks to establish a mechanism for refunding VAT to non-resident tourists, thereby enhancing our country›s overall shopping and tourism experience,” Mr. Claudio said.
“We recognize the immense potential this bill holds in attracting more tourists, stimulating retail businesses, and fostering overall economic growth. The bill is set to undergo floor deliberation in the Senate within the coming weeks, with plans for industry-wide implementation slated for the first quarter of 2024,” he added.
Meanwhile, Mr. Claudio said the retail industry will lead the transition to the GS1 bar code system.
“The whole world will transition from the one-dimension black and white vertical lines to quick response (QR) code matrix 2-dimensional bar codes,” Mr. Claudio said.
“The Philippine retail industry will spearhead the transition by requiring manufacturers and distributors to migrate to the QR matrix barcode for worldwide simultaneous implementation by 2025,” he added. — Revin Mikhael D. Ochave