Oliver Bugarin 11 0 0 4 min to read

In a new measure, DTI requests a 3-year tax exemption for small online enterprises.

As part of a new law to encourage online merchants to register with the government, the Department of Trade and Industry (DTI) is advocating for a three-year tax exemption period for small e-commerce businesses.

This was one of the elements being included, according to DTI Assistant Secretary Mary Jean Pacheco, in the proposed Internet Transactions Act, which was discussed before the Senate committee on trade, commerce, and entrepreneurship hearing on Monday.

When describing the other advantages of the clause, Pacheco said, “It will also encourage them to register and take care of their enterprises in the first two to three years as they expand into a bigger business.”

Under very particular conditions, the DTI’s plan would exclude newly registered e-commerce microenterprises from all local and federal taxes for the three-year period.

The plan prohibits registered business entities from being subsidiaries, affiliates, or franchises of any already existing business.

There cannot be any other registered firms, partnerships, or sole proprietorships, whether they were ever active or not.

Corporations must have no nominal stockholders holding the shares in trust for others and each stockholder must own at least a 5% share of the corporation’s stock for them to qualify.

In addition to advocating for the three-year tax exemption, the DTI stated that it was also working to create an e-commerce bureau and an online business register that would give customers access to data and information to confirm the legitimacy and existence of virtual business entities.

Business-to-business and business-to-consumer transactions as well as other online activities, such as online retail of consumer products and services, online travel services, online media providers, online delivery services, and digital financial services, are all included in the proposed legislation.

Transactions between consumers are excluded.

This year, at least 15 versions of the proposed legislation have been filed, including two in the Senate and 13 in the House of Representatives. All of these versions are still in committee.


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