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BSP chief seeks to exempt digital transactions below PHP 500 from VAT

The Bangko Sentral ng Pilipinas (BSP) wants to exempt smaller digital transactions from the proposed imposition of a 12 percent value-added tax (VAT).
BSP chief seeks to exempt digital transactions below PHP 500 from VAT
BSP facade (Photo from GMA News)

VAT on digital transactions

Last month, the House of Representatives approved on third and final reading the proposed bill seeking to impose a 12 percent VAT on digital transactions, which may affect Filipino users of known platforms like Netflix and Lazada.

BSP Governor Benjamin Diokno said he welcomed the development as "it's better to tax people on the basis of what they take away from society, which is consumption, rather than what you contribute to society which is income".

However, he suggested that consumers with smaller transactions should be spared from this measure.

Pero... I think, yung maliliit na transactions na nakakatulong sa ating mga mamamayan ay i-exempt natin sa VAT. In general, I think VAT is a good tax, pero yung small transactions, for example, less than P500 ay i-exempt natin, Diokno said in a recent briefing.

Diokno stressed exempting them from the measure will entice more consumers to avail of the digital services.

The BSP is targeting to make at least 50 percent of all transactions made in the country digital by 2023.

Source: GMA

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