The House of Representatives has approved a bill that imposes value added tax (VAT) on foreign or non-resident digital service providers.
According to the report of GMA News Online, members of the House Committee on Ways and Means have approved the motion for approval made by Nueva Ecija Representative Ria Vergara.
Albay Representative Joey Salceda, the panel’s chairperson, said that foreign digital service providers are earning income in the Philippines and are paying taxes in their home countries, and the government wants a share of that.
“Otherwise, it would be disadvantageous to our local digital service providers which pay VAT,” he said.
Salceda said that VAT on foreign digital services is expected to raise PHP 9USD 0.15INR 13EUR 0.15CNY 1 billion in government revenues.
Gabriela party-list Representative Arlene Brosas, however, pointed out that imposing VAT will mean additional expenses to consumers and prefers to tax corporations rather than consumption-based services.
Salceda responded by saying that service providers are already passing it on when they pay VAT in other countries.
YugaTech.com is the largest and longest-running technology site in the Philippines. Originally established in October 2002, the site was transformed into a full-fledged technology platform in 2005.
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Francis says:
So, following salceda’s logic, it is NOT “advantageous” for local providers, if the foreign providers pay 1 VAT (foreign) and pass 1 cost to local subscribers. He wants to make it “advantageous” for local providers by making foreign providers pay 2 VATs (foreign and local) and pass 2 costs to local subscribers. Effectively, this lawmaker is working for the local providers and NOT the consumer public.