By Liza Soriano
MANILA — Senate President Chiz Escudero stated that the 12 percent Value Added Tax (VAT) on digital transactions will increase government revenue by at least ₱80 billion.
The VAT on Digital Transactions, a priority measure of the administration, is expected to be signed by President Ferdinand “Bongbong” Marcos Jr. on September 30, Monday.
The measure aims to capture revenues lost due to the ambiguity of existing laws on the taxation of e-commerce transactions, particularly from foreign companies that are not based in the Philippines but provide services to local consumers.
“All businesses, big or small, pay taxes. It doesn’t seem fair that large foreign companies, which are not based in the Philippines but make significant profits from selling their services to Filipinos, are not subject to the same taxes. This new law simply ensures that everyone earning here in the country fulfills their tax obligations,” Escudero said.
The Senate President also noted that other nations, including the Philippines’ neighboring countries, have already imposed similar taxes on digital services and transactions as these have become almost universally consumed.
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