Rep. Joey Salceda suggests additional tax on digital services

Albay representative and House of Representatives Ways and Means Committee Chair pushes for putting an additional tax on digital services to compensate the government the cut on corporate tax up to 25% due to the economic consequences of the COVID-19 pandemic.

According to the report from Inquirer, Salceda wants to impose a value-added tax specifically on video and music subscriptions, ads on social media, and online shopping platforms by 12%. He intends to call it as the following: Lazada tax, Netflix tax, and Facebook Ads tax. The proposal also requires the presence of a country representative from Google and Facebook when creating digital advertisements.

The proposal aims to tap SMEs who have a presence on online shopping platforms. Under the proposal, online shopping platforms such as Lazada will serve as withholding tax agents of their suppliers.

When passed into law, it will allow the government to block the local operations of the said digital services should they don’t pay the right taxes nor comply with tax laws.

Source: The Inquirer