House Approves Bill that Adds VAT to Digital Transactions

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These days, many Filipinos rely on services that offer paid subscriptions to access services and content not just for education, but also for work and entertainment.

If you’re one those who do, you’ll probably be interested to know that the House of Representatives has approved House Bill No. 7425, which is aimed at amending the National Internal Revenue Code of 1997, imposing value-added tax (VAT) on digital transactions.

With 167 lawmakers voting affirmative and six voting negative, the bill, if signed into law, means that those who offer digital services will have to collect and remit VAT for every transaction that goes onto its platform.

  • Online advertisement services
  • Digital services that entail a subscription fee
  • Other electronic services delivered via the Internet
  • Online licensing of software, updates, and add-ons
  • West filters and firewalls
  • Mobile apps
  • Video Games
  • Online Games
  • Webcast and webinars
  • Provision for digital content (Music, Files, Images, Text, and Information)
  • Search engine services
  • Social networks
  • Internet-based telecommunications
  • Online training including distance learning, e-learning, online courses, and webinars
  • Online newspapers and journal subscription
  • Ad payment processing service

This basically means that consumers may end up paying more than what we are paying now for services such as Spotify, Apple Music, Deezer, Netflix, Canva, and many more, which for many, would mean tightening the belt further at a time when a lot of businesses are closing and many people are losing jobs, weakening their financial capabilities.

Source

Emman has been writing technical and feature articles since 2010. Prior to this, he became one of the instructors at Asia Pacific College in 2008, and eventually landed a job as Business Analyst and Technical Writer at Integrated Open Source Solutions for almost 3 years.

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