President Ferdinand “Bongbong” Marcos Jr. is seeking to impose value-added tax (VAT) on digital service providers to boost government revenues.
In his first State of the Nation Address on Monday, Marcos Jr. said that taxing online transactions could bring in ₱11.7 billion in government income this 2023.
“Our tax system will be adjusted, in order to catch up with the rapid development of the digital economy, including the imposition of VAT on digital service providers,” he said.
Marcos Jr. added that he wants tax compliance simplified for easier tax payment.
The President also mentioned other tax reforms, including the Passive Income and Financial Intermediary Taxation Act (PIFITA) that seeks to lower the tax rates on financial services and capital income and the Valuation Reform Bill that pushes for an efficient and equitable real property valuation system.
Both reforms are the last remaining packages under former President Rodrigo Duterte’s Comprehensive Tax Reform Program (CTRP).
Finance Secretary Benjamin Diokno has been a vocal proponent of imposing taxes on digital transactions, such as streaming services like Netflix, Amazon, Spotify, and Google, to boost revenues.
The Marcos administration has to deal with the debt left by the Duterte administration as it handled the COVID-19 health crisis.
The Philippines is ₱12.5 trillion in debt as of May 2022.
