Department of Finance looks to add VAT on digital services and cryptocurrencies

The Department of Finance is pushing to add new taxes including VAT on digital services and cryptocurrencies. It is supposedly a way to pay PH's debt.

New taxes + VAT for digital services and crypto?

DOF to add VAT and other taxes to crypto and digital services

To recap, the country's debt reached an all-time high of PHP 12.68 trillion last March. The DOF is looking for a way to decrease this by adding new taxes including VAT for digital services and cryptocurrencies. The DOF is aiming to generate at least PHP 349.3 billion in new revenues from 2023 to 2027.

If you remember, House Bill No. 7425 also known as an Act Establishing Digital Taxation in The Philippines, seeks to amend Section 105-A of the National Internal Revenue Code and obligates non-resident digital service providers to collect and remit VAT on transactions passing through their platforms. 

In terms of the DOF's plan to tax cryptocurrencies, not much is known yet. A carbon tax, a motorcycle tax, an excise tax on luxury goods and single-use plastics, and the implementation of taxes and charges on gaming i.e casino admissions and electronic betting activities are among the other measures mentioned. 

The DOF also proposed deferring the personal income tax reduction that was originally scheduled for 2023.

What do you guys think?

Source: ABS-CBN