SONA 2022: BBM to impose VAT on Digital Services

President Bong Bong Marcos Jr. announced in his first SONA that his administration plans to adjust the tax system including VAT on Digital Services.

BBM wants taxes on Digital Services

BBM to impose VAT on Digital Services

The President of the Philippines stated that the tax system will be adjusted to catch up with the rapid developments of the digital economy. He also added that By 2023, its initial revenue alone could reach roughly PHP 11.7 million.

Our tax system will be adjusted. In order to catch up with the rapid developments of the digital economy, including the imposition of value-added tax on digital service providers, Bong Bong Marcos Jr., President of the Philippines

Recently, Finance Secretary Diokno expressed that he strongly considers adding a VAT on digital transactions because it is a critical factor for generating PHP 348B income from 2023 to 2027. 

Also last year Diokno gave approval regarding the imposition of 12 percent VAT on digital services except those below PHP 500.

Earlier this month, he noted that Digital tax on services such as Netflix, Spotify is "only fair".

However, tax reforms like this might have an impact on the price of streaming services like Netflix, Spotify, Youtube Premium, Apple Music, and more. While it may appear as an additional burden for those who can pay, in return, this will also help the economy of the country.

Alongside it, PBBM also mentioned that the procedures for tax compliance will be streamlined to encourage convenience in paying taxes.

Tax compliance procedures will be simplified to promote ease of paying taxes, Marcos

To recall, the Finance secretary also earlier hinted that there would be two more tax reform packages to simplify the tax system.

What do you guys think?

Source: Inquirer