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Jekki Pascual

ABS-CBN News

<p><span dir="ltr" id="isPasted"></span>MANILA — Policymakers are now looking at how to implement a recently-passed bill that imposes a tax on foreign digital services such as Netflix and YouTube to boost government revenue and fund programs.</p><p>Last month, Congress approved a consolidated bill approving the imposition of a 12 percent value-added tax (VAT) on foreign digital services operating in the country. Observers said this could mean higher subscription fees for customers. The new measure, if approved by President Ferdinand Marcos Jr., is expected to provide the government with around P20 billion in tax revenues annually.</p><div><a href="https://news.abs-cbn.com/news/2024/7/31/congress-approves-vat-on-digital-services-2159" id="isPasted">READ: Congress approves VAT on digital services</a></div><p><span></span>On Wednesday, Finance Secretary Ralph Recto said the government could soon impose the VAT on foreign digital companies, adding he is confident that the law would be approved by President Ferdinand Marcos Jr.</p><p>&quot;Nararapat lang na pirmahan ng pangulo ito. Sinusuportahan ko ito. As early as now pinag-uusapan namin ng BIR (Bureau of Internal Revenue) kung paano ipatutupad ang batas na &#x27;yan,&quot; Recto said at the Kapihan sa Manila Bay forum.</p><div><span class="fr-video fr-deletable fr-fvc fr-dvb fr-draggable" contenteditable="false" draggable="true"><iframe width="640" height="360" src="https://www.youtube.com/embed/8gq8yHw8aYE?&amp;wmode=opaque&amp;rel=0" frameBorder="0" allowfullscreen="" class="fr-draggable"></iframe></span><br/></div><p>(It is only right for the president to sign this. I support it. As early as now, we are discussing with the BIR [Bureau of Internal Revenue] how to implement that law.)</p><p>Recto said foreign digital services firms should be paying taxes to the government, similar to what local companies are doing. This includes video streaming apps, online shopping sites, and other digital services owned by foreign companies.</p><p>&quot;Netflix, &#x27;yan ba nagbabayad ng VAT sa Pilipinas? &#x27;Yung income ng YouTube, dapat kasama &#x27;yan. Lahat nagbabayad ng VAT, bakit sila hindi?&quot; Recto said.</p><p>(Netflix, does it pay VAT in the Philippines? The income from YouTube should be included. Everyone pays VAT, why don&#x27;t they?)</p><p><span></span><span></span><span></span><span></span><span></span>Recto also said that even with the imposition of VAT, foreign firms would not pull out from the country.</p><p>&quot;Palagay ko hindi mag-pull out dito &#x27;yan dahil [for example] ang Facebook ay 80 million Filipinos nasa Facebook. Major market tayo para sa Facebook,&quot; he said.</p><p>(I don&#x27;t think they&#x27;ll pull out from here because, for example, there are 80 million Filipinos on Facebook. We are a major market for Facebook.)</p><div><span class="fr-video fr-deletable fr-fvc fr-dvb fr-draggable" contenteditable="false" draggable="true"><iframe width="640" height="360" src="https://www.youtube.com/embed/SXXISIRcjQ4?&amp;wmode=opaque&amp;rel=0" frameBorder="0" allowfullscreen="" class="fr-draggable"></iframe></span><br/></div><p><span style="background-color:transparent">Taxation should also cover every Filipino who sells online, he said. Recently, the BIR has mandated online shopping apps to impose withholding tax on eligible online sellers. </span>Facebook, TikTok, and other foreign social media services also offer platform for users to sell products.</p><div><strong>MORE TAX AMENDMENTS </strong></div><p>The Finance Department is also looking at four more potential tax laws or amendments this year.  This includes the single-use plastic tax, rationalization of mining tax, passive income and financial intermediary tax, and the motor vehicle road users charge.</p><p>Recto said the government needs to beef up revenue collection to fund several social services programs and infrastructure projects. The proposed budget for next year has also increased by 10 percent, which requires more revenue for the government.</p><style type="text/css" id="isPasted">
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<p>Last month, Congress approved a consolidated bill approving the imposition of a 12 percent value-added tax (VAT) on foreign digital services operating in the country, which could mean higher subscription fees for customers.</p>

Last month, Congress approved a consolidated bill approving the imposition of a 12 percent value-added tax (VAT) on foreign digital services operating in the country, which could mean higher subscription fees for customers.

Netflix fee hike soon? Gov't tackles tax rules for foreign digital services

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Netflix fee hike soon? Gov't tackles tax rules for foreign digital services

Jekki Pascual,

ABS-CBN News

Published Aug 07, 2024 04:47 PM PHT

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Updated Aug 07, 2024 05:38 PM PHT

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