Senator Pia Cayetano: “As the country moves towards more digitalization, so too must our tax regime.”
SENATOR PIA CAYETANO — The senator has filed a Senate bill seeking to impose value-added tax (VAT) on online transactions amidst the Philippines’ shift to digitalization and online commerce (e-commerce).
Senator Pia has filed Senate Bill 250 or “An Act Imposing Value-Added Tax On Digital Transactions In The Philippines”.
The said bill proposes amendments to the National Internal Revenue Code of 1997 to levy a value-added tax on the sale or exchange of services rendered electronically.
In filing the said bill, she cited e-Conomy Southeast Asia Report showing that the Philippines was the “fastest growing internet economy in the region” driven by food delivery services and e-commerce.
According to the senator, the Philippines has seen 12 million new digital consumers since the start of the coronavirus pandemic in 2020. 63% out of 12 million new digital consumers are from non-metro areas and 99% of them intend to continue using those services even beyond the pandemic.
“As the country moves towards more digitalization, so too must our tax regime,” the senator said in her explanatory note. “The government needs to catch up with the trends and constantly expend an all-out effort to strengthen its revenue-generating capability to aid our country’s economic recovery from the adverse impacts of COVID-19.“
Senator Pia said that the bill was based on the measure submitted to the Senate by the House of Representatives in the 18th Congress.
The senator also said that the bill seeks to level the playing field between the digital and traditional businesses by clarifying the imposition and collection of value-added tax from digital service providers.
She added that those are required in order to help the Philippine government monitor and collect value-added tax from persons engaging businesses on their digital platforms.
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