Two years after lawmakers proposed that digital services like Netflix and Facebook Ads should be taxed, the Department of Finance wants the incoming admin to tax all streaming services starting 2023, and crypto transactions by 2024.
In a number of slides shared by Rappler, the DOF laid out its proposed plans to the incoming administration on increasing revenue. Among its proposals under Package 1, which is set for a 2023 implementation, is the imposing of “12% VAT on online advertisement services, digital services, and supply of other electronic and online services.”
This is in line with what Albay Rep. Joey Salceda proposed back in 2020, where they see an opportunity to increase government revenue by imposing a tax on digital and streaming services. Congress passed House Bill 7425 in 2021 in approving taxes on digital transactions, and BIR has been collecting taxes from social media influencers. Despite the passage of the bill, we have yet to see any price increases from streaming services like Netflix and Spotify.
Should this be implemented, the DOF sees an added revenue of around Php 13.2 billion per year.
Aside from taxing all forms of digital services, the DOF is also eyeing a tax on crypto transactions by 2024, though the agency has to further discuss on how cryptocurrency transactions–like those in play-to-earn games like Axie Infinity–will be treated.
As of this writing, both the Securities and Exchange Commission (SEC) and the Bangko Sentral ng Pilipinas (BSP) have yet to classify Axie Infinity’s SLP and AXS currencies as taxable ones.
