Local retailers predict the industry's steady growth would see the space contributing 20% to the country's gross domestic product (GDP) this year.
Philippine Retailers Association (PRA) president Roberto Claudio told reporters on the sidelines of the National Retail Conference and Export 2024 that the sector is optimistic that its GDP share could increase to 20% this year or early 2025, compared to the 2022 level of 18.6%.
"The GDP contribution of retail has been going up at least one to two percent a year," he said.
He said retailers have contributed an average of P750 billion annually in taxes between 2017 and 2022.
Claudio said the retail sector's contribution to government revenues could be more significant if online transactions were also subject to taxes paid by brick-and-mortar stores.
Online marketplaces are currently not subject to value-added tax (VAT) in the Philippines, giving them a competitive pricing edge of up to 17 percent over local retailers.
Brick-and-mortar stores are paying 12 percent in VAT, and some are slapped with 5 percent duties.
Since most of the products in these marketplaces come from foreign markets like China, Claudio said the current setup supports foreign retailers and poses a significant challenge to traditional local retailers.
He also called on the government to fast-track the implementation of the Internet Transactions Act, which will level the playing field in terms of taxes between physical and online stores.
Comments