Government urged to support instead of closing startup unregistered online business

A former government official now leading a think tank group expressed concern as to how the Bureau of Internal Revenue’s (BIR) threat of closing unregistered online businesses can actually help small-time startups in the said market.

Atty. Nick Conti, Convenor of the CLICK Partylist and CEO of Capstone-Intel Corp., said that while they support the Bureau of Internal Revenue’s (BIR) recent statement regarding the possible suspension of unregistered online businesses under Revenue Regulations No. 15-2024, they are also looking at how it can potentially kills the small online sellers.

COURTESY: Nick Conti FB Page

The BIR made the recent statement regarding the possible suspension of unregistered online businesses under Revenue Regulations No. 15-2024.

“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,” Atty. Conti, a former DOTR spokesman and former officer-in-charge of the Maritime Industry Authority said.

“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.

Courtesy: BIR

Under the new regulations, online businesses that fail to register with the BIR could face suspension through closure or take-down orders affecting their websites, accounts, or platforms. 

Atty. Conti said that while the regulation seeks to ensure fair taxation across physical and digital platforms, there is growing concern that many unregistered online sellers may be driven out of business.

He also emphasized the need for a more inclusive approach, where the government actively helps startups transition into the formal economy. 

“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 added.

CLICK Partylist, which advocates for innovation and digital inclusivity, is urging the government to create programs that simplify the registration process for small online sellers. These programs could include offering registration fee exemptions for the first year, providing access to free or low-cost legal advice, and setting up mentorship initiatives to guide startups through compliance requirements.

“With the BIR now closely monitoring platforms like Lazada, Shopee, and TikTok to ensure sellers are registered, it is essential that we find a balance. CLICK Partylist fully supports fair taxation, but we must also ensure that our small entrepreneurs are not left behind. The digital economy thrives on innovation, and by supporting our startups, we help them scale into legitimate, tax-paying enterprises,” Atty. Conti said.

As the Philippines continues to implement the Internet Transaction Act of 2023, CLICK Partylist and Capstone-Intel Corp. reiterate their call for the government to offer more than just regulation—they must provide startups with the tools to comply and succeed. 

Banner Photo Courtesy: Adobe Stock