Bongbong Marcos: Impose VAT on digital service providers

Updated @ 11:58 p.m., Monday, July 25, 2022

MANILA, Philippines — President Ferdinand Marcos Jr. on Monday said the government’s tax system would be adjusted to include the imposition of value-added tax (VAT) on digital service providers.

In his first State of the Nation Address (Sona), Marcos Jr. said that imposing VAT on digital service providers was projected to generate P11.7 billion in income for the government.

“Our tax system will be adjusted, in order to catch up with the rapid development of the digital economy, including the imposition of VAT on digital service providers,” he said.

Marcos Jr. added that tax compliance procedures would also be simplified to promote ease of paying taxes.

In May this year, it was learned that the Bureau of Internal Revenue is working on a system to collect VAT from foreign digital service providers, including global giants like Amazon, Google, Netflix, and Spotify.

The House of Representatives, meanwhile, already passed House Bill No. 7425, which clarifies that all digital service providers — whether operating just locally or across borders — would be subject to VAT.

Under the bill, digital service providers would be liable for assessing, collecting, as well as remitting the VAT slapped on transactions that went through their online platforms.

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