Next tax targets House greenlights VAT for big tech firms photo from Business Standard
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Next tax targets: House greenlights VAT for big tech firms

Sep 22, 2021, 7:21 AM
Rose De La Cruz

Rose De La Cruz

Writer/Columnist

The Philippines follows its neighbors in Asia in imposing value added tax to big technology companies like Alphabet, Facebook, Netflix, Spotify and Alibaba’s Lazada with the House of Representatives passing on third and final reading a measure imposing 12 percent VAT on these firms.

AIMING to raise P29 billion more to fund the government’s pandemic response, the House of Representatives has approved a bill imposing taxes on tech giants like Facebook, Alphabet's Google and YouTube, and Netflix.

Voting 167-6-1, lawmakers late on Tuesday approved on third and final reading a bill imposing a 12 percent value-added tax (VAT) on digital transactions in the Philippines.

It will require foreign-based digital service providers to assess, collect and remit VAT on the transactions that go through their platform.

In July 2020, a lower house committee approved the bill, which will tax firms that provide digital service or goods through an online platform. A similar bill has been submitted to the Senate.

Funds for pandemic

The bill aims to raise P29 billion ($579 million) to help fund government measures to fight the coronavirus.

The Philippines is a growing market for big tech firms, with Filipinos among the heaviest social media users in the world.

Alphabet, Facebook, Netflix, Spotify and Alibaba's Lazada did not immediately respond to requests for comment.

It follows similar moves by other Southeast Asian countries to generate revenues from popular digital services.

Last year, Indonesia imposed a 10 percent VAT on sales by technology firms. Early this month, Thailand started collecting VAT from foreign tech companies.

Tags: #taxes, #ValueAddedTax, #technologycompanies


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