After years of proposing a bill to impose taxes on digital services like Netflix, lawmakers in the Philippines recently finalized a bill where VAT will be imposed on digital services.
Senate Minority Leader Koko Pimentel said that there was no contention with the bill that will impose taxes on digital services, specifically those based abroad, as this would even out the field for all online service providers. “Ipapantay lang natin kasi unfair naman sa mga local na pinapatawan ng VAT,” Senate Ways and Means Committee chair Sherwin Gatchalian said.
While they did not specify how much VAT will be imposed, Gatchalian and Pimentel estimate that imposing taxes on digital services can let the country earn an additional Php 18 to 20 billion a year. The additional income is planned to be used for constructing schools and new infrastructure and for creative industries like scriptwriting and filmmaking. Back in 2020, the proposed “digital tax” was at 12%, which is significantly higher than the 5% tax imposed in other countries.
With the joint version of the bill already finalized, Gatchalian hopes that President Bongbong Marcos will asign the bill into law in the next 30 days and implement it in the next 3 months.
