To register or not register: Bane or boon for online sellers?

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It was a bad time to have a baby.

Babies are always welcome, but when all possible means of earning are shut down, when all human-to-human transactions are discouraged and thus all potential means of income are eliminated, the prospect of having another mouth to feed could be downright terrifying.

With a babe in the crib and a husband suddenly out of job – hubby is seafarer who got stranded with no means of leaving, no thanks to a community under quarantine —  Pia Yap-Maestrecampo knew she could not afford to be caught flat-footed. 

Not during a pandemic.  Not while she has a baby who has to be fed, clothed, and taken care of daily.

So she ventured into online selling.

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“[My husband and I] both realized that we needed to earn a little extra during the lockdown,” Pia told DNX, “My husband is tagged now as a stranded OFW so that comes with the fact that he is ‘no work, no pay’.”

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Pia sells everything from seafood to protective gear.  The more, the merrier.  Or more accurately, the more varied the goods, the more chances of expanding clientele.

The grand total of her net income every month? P6,000.

TAXING SELLERS

Early this month the Bureau of Internal Revenue issued a memo requiring online sellers to register their businesses and settle their taxes.

Memo circular of BIR directing online sellers to register, with deadline on end of July next month.
Memo circular of BIR directing online sellers to register, with deadline on end of July next month.
Annex A of BIR memorandum circular with list if requirements for sellers.
Annex A of BIR memorandum circular with list of requirements for sellers.

This caused an uproar among the sellers, even when Presidential Spokesperson Harry Roque assured that only those with a net income of P250,000 yearly will be taxed.  It did not, in any way, come off as reassuring to some.

“It’s untimely,” Sherie “Sheng” Bustamante bluntly said.  Sheng is an events organizer and host based in Tagaytay who had found herself bereft of a source of income because of the pandemic.  With social distancing fast becoming adopted into the new normal, it is unlikely that the events management business is going to be as happening as it had been pre-pandemic.

Sherie "Sheng" Bustamante during the pre-pandemic days.  Sheng is an event host and entertainer based in Tagaytay who found herself out of projects because of the pandemic. | Photo from Sherie Bustamante's Facebook page
Sherie “Sheng” Bustamante during the pre-pandemic days. Sheng is an event host and entertainer based in Tagaytay who found herself out of projects because of the pandemic. | Photo from Sherie Bustamante’s Facebook page

So Sheng shifted to the online business.  She started first with “pre-loved” items, which is jargon  for second-hand items, things she had used but no longer needed, like old bags, unused cologne, unused cosmetic items.

Eventually, she started branching out, selling any and all things that man had thought of inventing – from pajamas, to motorcycle accessories, even fruit, and food items like snacks and desserts, and frozen food.

“It sounds like a lot but… I did not spend a huge capital on these.  Friends and kind suppliers help me through photos and handing me their goods over,” Sheng shared.

Sheng supports the idea of a registering, and in fact has done it with her own business.

There are benefits, she said, since she can use her official papers as travel pass (delivery of food is considered essential under a community quarantine).

“Who would not like a legal business? Only scammers. As for a non-scammer like me, the registration is okay because you can register for as low as P230 for a barangay-wide DTI certificate. Being registered in DTI boosts the credibility of the online business,” she said.

Her main qualm, however, is the timing.

Pia Yap-Maestrecampo, showing off some of the wares she is selling -- fresh crabs.  Pia has to resort to online selling after her husband -- a seafarer -- got stranded during the pandemic. |  Photo from Pia Yap-Maestrecampo's Facebook page
Pia Yap-Maestrecampo, showing off some of the wares she is selling — fresh crabs. Pia has to resort to online selling after her husband — a seafarer — got stranded during the pandemic. | Photo from Pia Yap-Maestrecampo’s Facebook page

There is a pandemic and online businesses at this point need support, not deadlines and threats of punitive action for delinquents.

There is, Sheng said, the matter of fees “which will not stop with registration”.

A registered online seller would have to keep records of accounts, and since not everybody knows bookkeeping, that means hiring the professionals like an accountant or bookkeeper.

There are also other requirements, like the issuance and printing of official receipts.

On paper, BIR might just be doing its job.  But reality bites. 

And bites down hard.

There is a pandemic, after all, but instead of offering help to those who had to resort to selling after losing their jobs, government instead imposes taxes, or heap sellers with requirements which even at the barest minimum, the start-ups could hardly afford.

HELLO VIRUS, BYE JOB

Meet Nadine*, a public school teacher whose side business is selling mainly food items which she posts on her Facebook account. 

Young mother Pia checking on the quality of the seafood she is selling. | Photo from Pia Yap-Maestrecampos's Facebook page
Young mother Pia checking on the quality of the seafood she is selling. | Photo from Pia Yap-Maestrecampos’s Facebook page

Her Facebook used to be filled with family stuff – eating out, celebrating her weight loss, the obligatory selfie or two.  Now, her wall is flooded with pictures of goodies she is selling – from processed food to fruit, to chicken, to sea food.

Sample of post of by an online seller: dried pusit and fish.   Photo taken with permission from an online seller's Facebook page.
Sample of post of by an online seller: dried pusit and fish. Photo taken with permission from an online seller’s Facebook page.

Nadine, like Pia, had to resort to online selling because her husband found himself out of a job, no thanks to the pandemic.

Instead of relying on government’s help, they decided to act in order to survive.

It required hard work, she said, but Nadine knows she and her family had to pull through, so sell they did even if it means earning only a few pesos per item – roughly between P5 to P10.  Her net monthly income varies from P5,000 to P10,000 depending on the gross sales.

Unlike Sheng, however, Nadine has not registered her business.

“I can’t afford to register at this point,” she said.  What little she earns, she said, usually go to daily needs for her family.

Pia echoed Nadine’s take on registration.

“I didn’t think to register because this is just a temporary set-up, to help us get through the rough times,” she told DNX.

What she found “funny and insulting” is that government decided to tax online sellers while a health crisis is going on.

“Everyone is struggling to survive now… How much does the government expect from our earnings?” she said.

Even the minimum requirement of registering her online business is too steep a price to continue operations.

“Registering means paying for registration, and how much would that be? It could eat up our entire earnings for a month, which are not enough to cover for the fees,” Pia said.

Registering would also mean spending a day or two chasing after documents and setting up appointments and gathering necessary requirements, which for small sellers like Pia would mean a missed opportunity to earn.

Meanwhile, Nikki*, a former reporter, was also pushed into online selling because, according to her, her projects and business ground to a halt, no thanks to the pandemic.

She has been into online selling for a month now, and has been earning a rather decent amount from her new business.

It helps that she already enjoys cooking (“It has been my passion”) so she merely turned her hobby into something she can actually earn from.

When it comes to registering her business, her stand is not as rigid as the others.  In fact, she is planning to register eventually.

But, she said, government should consider those that got into the business of online selling because they were forced with no other options.

There should be guidelines, Nikki said.

“There are sellers whose incomes are barely enough for their daily needs.  I think these should be exempted,” she said.

QUO VADIS ONLINE SELLERS?

With a pandemic showing no signs of slowing down and online sellers given a deadline to register their business, some online sellers are now at a crossroads: To register or not to register, that is the question.

Registering would make their businesses legit, true, but that would also mean certain deaths to some with little-to-no income.

“The untimely BIR registration will bring online selling economy down,” Sheng warned. Registering would mean paying for fees, and where would the seller get the extra income for the payment? 

Sheng said that with all the fees that online sellers have to spend on registration and its supporting requirements, they would be left with no choice but to increase their prices.

If that would be the case, then it might drive away customers.

Nadine shares the sentiment.

“Most of us who went to online selling did so because this is our way to survive,” she said.

What they need at this point, she said, is government help, not a registration which would just be an added burden.

For some, on line selling means additional income.  For others, it is the only way to survive.

Survival. 

That seems to be the common theme among the sellers interviewed.

And, they agree, registration at this point while a health crisis is ongoing might mean cutting off their means of survival.

“What we earn,” Sheng said, “is not enough to cover registration fees. It is just enough for bills and food – for survival.”

*Some names have been changed upon request of persons concerned.

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