Last Saturday, in our radio program, Executive Session, aired over radio station DZRH, my co-hosts DFA Secretary Teddy Boy Locsin, Jr., Cavite Rep. Boying Remulla, former Senator JV Ejercito, former Rep. Jonathan Dela Cruz, Undersecretary Dodo Dulay, Paolo Capino and I discussed the sad plight of Filipino online sellers in the face of a “threat” by the Department of Finance (DOF) to slap a tax on their earnings from e-commerce.
While we respect the views of our co-hosts that government needs to replenish its coffers to fund various public programs, we hope the DOF would reconsider the move to tax them during the COVID 19 crisis.
We were informed that Senators Miguel Zubiri and Sherwin Gatchalian over the weekend, also slammed the plan by the Bureau of Internal Revenue (BIR) which is under the DOF, calling it “ill-timed, insensitive and unnecessary.”
The good Senators have a point. At this time when Filipinos are doing their best to survive the impact of the crisis on the economy, taxing Filipino online sellers would be like telling their families to have less food at their dining table.
The hundreds of thousands of Filipinos who have recently entered the world of e-commerce are not your cut-and-dried businessmen who want to rake in a handsome profit by taking advantage of the severe restrictions on human movement and mobility.
These newly-minted digital entrepreneurs are like “evacuees” or “exiles” in a raging war that destroyed that their means of livelihood.
They are not doing business online to become rich – they are selling online to have something to eat today and to help their families live another day.
If the DOF would take a closer look at these online entrepreneurs, they would discover that these are Filipinos who lost their jobs or whose businesses had to fold up in the aftermath of the unprecedented health crisis we now face.
They are former employees, erstwhile baristas, working students, used-to-be sales crew of food establishments which had closed down.
They are people who used to be event organizers, stage performers, professional trainers, and subject matter experts whose business died as soon as the government banned public gatherings.
A good number of them are basketball players who, just months ago, had live contracts with teams included in a major league.
With the ban on sports events, these erstwhile celebrity athletes are now on hand-to-mouth existence and had resorted to selling food items, nutritional supplements and whatever consumer goods can be peddled using social media.
In many ways, these Filipinos are “heroes” – at least to their families.
They endure the “embarrassment” that come with the transition from celebrity to online seller of cooked food or frozen meat items.
Many of them have not been spared from the occasional “bashing” by netizens who call attention to the fact that the person selling embutido or dishwashing liquid online used to be a manager, teacher or a corporate executive.
The sudden growth of the digital entrepreneur sector should be seen as a bright spot.
This phenomenon shows that many Filipinos who lost their jobs and livelihood have chosen a positive and proactive response to the crisis.
Philippine social media is crowded by posts about food items like leche flan, sushi, longganiza being sold or resold.
This is good news. This means Filipinos are actively finding ways to survive instead of complain about the current situation”.
Digital entrepreneurs, particularly the newbies, have become some kind of an informal yet powerful community in the online world. In this community they reportedly help each other, buy from each other, and promote each other’s products.
We hope the DOF is not entertaining the notion that these small businessmen are like the giant Amazon and its local counterparts. Far from it.
What we hope the DOF would note is that this community of online sellers or resellers are the embodiment of the “bayanihan” spirit.
This is “bayanihan to survive as one."
The DOF-BIR's “insensitivity” to the plight of the small entrepreneur - as pointed out by the two Senators – is a stark contrast to the approach adopted by some of our outstanding solons in the past.
When dealing with taxation issues, their strategy was to tax luxury items in order to alleviate the situation of the poor or help the underprivileged.
We recall that when the government needed to fund the requirements of what was then a proposed Universal Healthcare Law, then Senator Ejercito moved to raise the excise tax on cigarettes.
Senator Ejercito had to contend with the strong lobby and public relations campaign of tobacco interest groups which attempted to derail the passage of that then proposed law.
Solons like Senator Ejercito – who was then chair of the senate committee on economic affairs - stood up against the lobby.
When the law was finally passed, Senator JV was able to ensure funding for the Universal Healthcare Law, his then pet bill.
That’s the right approach to taxation. It did not unduly add to the burden of the poor and underprivileged. Instead, it helped better their lives and gave them an expanded access to decent and adequate healthcare.