The Philippine government is getting close to its goal of putting a 12% value-added tax (VAT) on Netflix and other digital transactions. This is something they have been trying to do for a long time.
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After the plenary made changes to House Bill 4122, it was passed during the second reading. The bill wants to charge registered digital service providers not from the country a 12% VAT (DSPs). But people who do work for the government directly are exempt and will only have to pay 5% VAT.
A few other things, like webinars and online courses from private companies, are also exempt from the rule.
Still, those changes haven’t been make public yet. But before the changes, it was say that the goal was to make things fair between traditional businesses and digital businesses by putting a VAT on digital businesses as well.
This will also help the government make more money by giving them more ways to get money. A report from before says that this new VAT will bring in an extra ₱11.7 billion for the government.
The final vote on House Bill 4122 will take place in the next few days.
It should also affect services like Shopee, Lazada, Canva, Apple Sevices, VPNs, Spotify, Disney Plus, and other digital transactions and services in addition to Netflix.
Carlos Isagani Zarate, who used to be a Makabayan representative, was against the idea of putting a value-added tax (VAT) of 12% on Netflix, Spotify, Lazada, and other online service providers.
Zarate pointed out that the proposed tax is another measure that hurts the poor and middle class more than it hurts the rich and big businesses.
The progressive leader also said that, even though it was say that the foreign company would be tax. customers would still have to pay VAT because it is a “pass-through” tax. It will cause prices for subscriptions, service fees, and even online products to go up.
