Digital tax may not be easy to implement in PH, said experts
Imposing taxes on digital transactions in the Philippines may not be as easy since it would require the voluntary compliance of foreign companies, according to experts.
P&A Grant Thornton Tax Advisory and Compliance Division Head Eleanor Roque said “it will be very difficult for the government to capture all these transactions with foreign corporations especially if the client or buyer here in the Philippines is an individual who is not in business.”
Tax Management Association of the Philippines (TMAP) President Fulvio Dawilan said consumers have previously been able to “escape the burden of taxes” by making transactions on digital platforms.
Both tax experts called for clearer guidelines with regards to when non-resident digital service providers are taxed. Roque suggested identifying big companies first to ensure their compliance.
Under House Bill 372, refiled by Albay Rep. Jose Maria Clemente Salceda, all digital service providers with operations locally and abroad would be subject to a 12% VAT. This includes online advertising, subscription services, and the supply of other electronic and online services that can be delivered through the internet.
Foreign digital service providers, whose gross sales exceed P3 million (US$54,000), would be responsible for assessing, collecting, and remitting the VAT on transactions that go through their online platforms.
According to President Ferdinand Marcos, Jr., taxing digital transactions could bring around P11.7 billion (US$211 million) in revenues if implemented in 2023.
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