DOF says VAT on digital services clarifies imposition of levy
Finance Secretary Benjamin Diokno clarified that the proposed value added tax (VAT) on digital services does not impose new taxes, it only clarifies the scope and imposition of the said levy.
After the House of Representatives approved House Bill (HB) No. 4122 or “Imposing Value-Added Tax on Digital Transactions” on the third and final reading, Diokno said that the bill aims to ensure that taxes are imposed and paid fairly.
“It is only right that we allow our businesses to operate on even ground, and this bill rightfully clarifies which digital services to tax,” Diokno said in a statement on Friday, Dec. 2.
“It is not fair to only tax traditional businesses like restaurants and retail stores, and not tax online platforms like Netflix,” he added.
The finance chief noted that educational services such as online courses and webinars rendered by accredited private educational institutions are exempted from the imposition of VAT.
Digital service is defined as any service that is delivered or subscribed to via the internet or other electronic network service.
HB No. 4122 is expected to level the playing field between digital and traditional businesses.
