Online payment systems under surveillance

The Ministry of Finance oversees online payment and lending platforms. MANILA TIME FILE PHOTO

The Ministry of Finance (DoF) said it is closely monitoring the tax compliance of social media platform LYKA and other similar entities that conduct certain transactions in the digital space.

In a recent interview with reporters, Assistant Finance Secretary Dakila Elteen Napao said the Bureau of Internal Revenue (BIR) was looking into LYKA’s operations for probable tax issues.

LYKA is a social media platform that previously allowed users to buy, sell and use Gift Cards electronically (GEM) as a means of payment for goods and services, which is now prohibited by the Bangko Sentral ng Pilipinas (BSP) because LYKA is not a payment system operator (OPS). PSOs are those that operate platforms that allow payments or transfers of funds, whether the source and destination accounts are managed by the same institution or by different institutions, in accordance with the law of the Republic 11127 or the ” National Payment Systems Act ”. Because Lyka previously operated as a payment, the DoF “will examine their income and expenses, and their profits to tax them,” said Finance Secretary Carlos Dominguez 3rd.

As the central bank examines LYKA’s payment method, he said the finance department is examining its tax implications.

“So we’re working in parallel with them (BSP),” Dominguez explained, “but we’re not just looking at Lyka, but all of the other taxable transactions going through the digital space.” He said the Securities and Exchange Commission (SEC), for its part, is reviewing all of these digital companies to see if they are properly registered with the agency.

“So all the regulators and tax authorities are now focusing on the digital space, because there is a very big danger of fraud, of law violations in the digital space. It’s so new but all the big agencies focus on new technologies, “said the CFO.

Meanwhile, the Bureau of Internal Revenue (BIR) said in a statement that it is closely monitoring FinTech or FinTech companies nationwide to ensure they are paying their fair share of taxes because their products and services continue to influence consumer preferences, especially during this pandemic.

“The BIR will continue to gather information and knowledge from other regulators on identifying, addressing and reducing gaps resulting from the development and proliferation of fintech entities that are not clearly or explicitly covered by regulations. existing, ”said BIR Deputy Commissioner Marissa Cabreros in a press release. declaration. The tax office said fintech companies are classified by the SEC as operators, issuers and service providers of electronic payments, alternative credit rating companies, online loan companies, digital banks, credit card companies. virtual asset services, gaming platforms to win, crowdfunding platforms, big data companies, digital advisors and insurance technology companies, among others.

Cabreros added that the BIR will establish a team to assess the tax obligations of the activities of FinTech companies based on the categories identified by the SEC and those regulated by the BSP, and will ask its large taxpayer service unit to verify the Large existing taxpayers engaged in activities that are variations of existing businesses to ensure that the correct taxes are paid.

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