How the New BIR Mandate Affects our Store

You may or may not know that the Bureau of Internal Revenue (BIR) has imposed a Withholding Tax on gross remittances made by electronic marketplaces starting from April 15, 2024. Electronic marketplaces include platforms such as Shopee, Lazada, Tiktok, Grabmart, Pickaroo, and any website that you can think of.

What does this mean for all online sellers? Behind the scenes, all online sellers have been struggling to attend withholding tax seminars and get their business documents in order. All marketplaces require their account holders to upload their business registration documents. Otherwise, their accounts will be suspended. You may have noticed that between April 15-18, some stores disappeared online.

That was not us, but we were already a registered business. However, it did not mean that we could just sit back. This new mandate meant that we had to issue official receipts for every online transaction. While it may sound easy, it is not. We go through hundreds of orders per day, and that extra step of writing down invoice details requires more resources and would slow down the fulfillment of orders.

We have always prided ourselves on processing orders within 1-2 business days. 90% of our orders are processed within 1 business day. So, we knew that we had to think of a more automated way to continue with this service level.

We considered hiring another person to physically write invoices or having a Point of Sale (POS) system that is BIR accredited. The former felt inefficient to us, so we invested in a new system, device, and subscriptions, details of which will probably bore you.

We also had to recalculate the "profit and loss" for every transaction scenario after this new investment and new process. We are a business after all and we need to make sure we are liquid enough to sustain this level of service.

That's why you might notice a price increase across most of our SKUs. It was not a lot, and we are still "giving up" more money than what we are trying to recoup, but at least it got us to a point where we could sustain our business.

Fast forward to April 15, and we get another memo that the mandate is extended for another 90 days and will commence on July 15 instead. It was a little last minute. The extension is great for other businesses that were not ready for this change, but we already worked overtime to get the wheels running exactly on April 15.

You may ask why we have not rolled back our prices. We could not roll back our prices because we started issuing receipts. We also have the terminal in place and paid for subscriptions to have this system running smoothly.

You may also wonder why we do not have the lowest price in the market. Honestly, because we cannot afford it.

We understand that as a customer, you have a lot of options when it comes to shopping. That's why we want to take a moment to highlight what makes our store unique. We believe in providing you with a convenient and hassle-free shopping experience. We know that customer service can make all the difference, and we promise to deliver the kind of service that you might not find elsewhere.

We take your health and safety seriously, which is why we ensure that every single product in our shop has a best-before date displayed under product details. This is manually updated every replenishment cycle, which happens weekly for most products. We also strive to pack and ship your order within 1 business day, and sometimes even ask our staff to work on select holidays to make that happen.

We want to offer you a variety of choices that you might not find in other shops, and we're committed to keeping our staff happy by offering more than just a minimum wage. We know that price is an important consideration for many customers, and while we may not always be the cheapest option, we believe that the value we offer is worth the minimal price increase.

We appreciate your support of our still fairly small business, and we hope that this gives you a better understanding of what goes on behind the scenes as we strive to survive and thrive in the ever-changing landscape of doing business in the Philippines.

P.S. If we happen to forget to include a receipt in your order, email us with your order ID at hello@rawbites.com.ph and we can email it to you too!