Albay Representative Joey Salceda is pushing to the imposition of taxes to digital services like the subscription to video and music streaming applications, ads on digital media sites, and making online sales platforms as withholding tax agents.
Aptly called, Netflix Tax, Lazada Tax, and Facebook ads Tax, the imposition follows after the discussions on how to offset an estimated P 120 billion in foregone revenues to aid the pain inflicted by the COVID-19 Pandemic on businesses.
According to the report published by Inquirer, the solon said that the current standard digital services tax on subscriptions worldwide was at 5 percent. Salceda noted that the Philippines might as well slap a new 12 percent tax to these subscription services with a current worth of P5 billion, after noting that Chile imposes a higher 19 percent. He also noted that the current situation of these digital assets werent levied any tax by the Philippine government.
Since only 50 percent of vendors sell their goods and pays VAT. Salcedo noted that the Lazada tax will cover the other 50% of online shops that sell goods but do not pay taxes.
The solon told Inquirer that if this happens, with sales of the Philippines’ e-commerce sector estimated to reach about P260 billion this year, VAT collections should reach around P30 billion.
FACEBOOK ADS TAX
For Facebook ads tax, Salceda said the idea was to require that digital advertisements be made through a country representative of Facebook and Google so it becomes least problematic. As such, the collection of 12-percent VAT and corporate income tax among digital advertisers will augment the current revenue base, he explained.
*This story originally appeared on Inquirer.net. Minor edits have been made by the StyleMNL editors.
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