Solon: 12% VAT on e-commerce sites could hurt small businesses, consumers

MANILA, Philippines — The proposed 12 percent value-added tax (VAT) to be imposed on e-commerce sites may ultimately hurt consumers and small businesses in the long run, a lawmaker warned on Friday.

In a statement, Bagong Henerasyon Rep. Bernadette Herrera-Dy said should the measure become law, VAT will be passed to consumers in the form of higher prices.

This, for Herrera-Dy, is “totally unacceptable at this time of economic uncertainty” brought by the coronavirus pandemic.

She added that small-time businesses that operate on e-commerce sites such as Lazada and Shopee will also be affected.

“Many of our kababayans have lost their jobs due to the pandemic had to resort to selling products and services online just to make ends meet,” she said.

However, she said she “fully supports” the proposed VAT to be imposed on subscriptions to Netflix, as well as other video and music streaming sites, which, according to Herrera-Dy, is “a market currently worth about P5 billion.”

This comes after the House committee on ways and means approved a bill which will impose additional taxes on streaming services and e-commerce sites.

But small businesses, including those engaged in online selling whose sales are below P3 million, will continue to be VAT exempt, according to House panel chairman, Albay 2nd District Rep. Joey Salceda.

/MUF