MANILA (Reuters) – The Philippines plans to impose a 12% value-added tax (VAT) on digital services provided by tech giants such as Amazon, Netflix, Disney and Alphabet, leveling the playing field with domestic companies. It’s movement. The Internal Revenue Service said Thursday that they were mortar gunners.
President Ferdinand Marcos Jr. on Wednesday signed a bill imposing value-added tax on non-resident digital service providers such as streaming services and online search engines.
“This will promote fair competition among businesses that profit from consumers here in the Philippines. A level playing field creates better products and services,” Internal Revenue Secretary Romeo Lumagui said in a statement. ” he said.
According to the agency, currently only domestic digital service providers are required to pay the 12% value-added tax.
Netflix does not have a statement to release at this time, a company spokesperson for Asia Pacific said in an email. Disney, Google and Amazon did not respond to requests for comment.
The government aims to collect 105 billion pesos ($1.9 billion) from value-added taxes from 2025 to 2029. The Presidential Communications Office announced that 5% of the proceeds will be used to fund projects in the Philippine creative industry.
The department added that education and public services are exempt from value-added tax.
Digital services provided by foreign companies will be deemed to have been provided in the Philippines if they are consumed in the Southeast Asian country, the revenue agency said.
Since the pandemic, tech giants have increased their presence in Southeast Asia, but they also face increasingly strict fiscal and tax regulations.
(1 dollar = 56.15 Philippine Pesos)
(Reporting by Neil Jerome Morales; Editing by Jacqueline Wong)
