The Philippines has announced a 12% value-added tax (VAT) on digital services provided by major tech companies such as Amazon, Netflix, Disney, and Alphabet. This move is intended to level the playing field for domestic retailers. President Ferdinand Marcos signed the law targeting non-resident digital service providers like streaming services and online search engines.
The taxation aims to ensure fair competition among businesses benefiting from Filipino consumers, according to the head of the Philippines Tax Bureau, Romeo Lumagui. Previously, only domestic digital service providers were subject to this VAT. The government aims to collect 105 billion pesos ($1.9 billion) from this tax between 2025 and 2029.
Additionally, 5% of the revenue generated from this tax will be allocated to fund creative industry projects in the Philippines. The Presidential Communications Office mentioned that education and public interest services would be exempt from VAT. The taxation applies to any digital service consumed in the Philippines, even if provided by foreign companies.
