BY CHARISSA L. ATIENZA
The House Committee on Ways and Means approved on Wednesday a measure imposing a 12 percent Value-Added Tax (VAT) on digital transactions in the country aimed at raising P10-billion new revenues for the government’s fight against COVID-19.
After less than one hour of virtual deliberations, the House panel, chaired by Albay Rep. Joey Salceda, passed the unnumbered substitute bill imposing tax on the digital economy. The substitute bill, which is a consolidation of three measures and a resolution, seeks to amend seven sections and add a new section of the National Internal Revenue Code of 1997, as amended.
“The Committee hereby approves the Unnumbered Substitute Bill on HBs No 6765, 6944, and 4531, integrating the concerns under HR No. 685. The Secretariat is hereby directed to file the appropriate Committee Report,” Salceda, one of the principal authors of the bill, said.
The Salceda panel approved the substitute bill presented by AAMBIS-OWA partylist Rep. Sharon Garin, vice chairperson of the House panel and one of the main proponents of the measure.
Garin, chairman of the technical working group (TWG) that consolidated the bills and resolution, said the substitute measure covers the digital advertising services, such as those on search engines and social media platforms; subscription-based services, including music and video streaming subscriptions; and services rendered electronically; and transactions made through an information technology infrastructure, such as the Internet.
She clarified that the bill is not targeting the micro, small, and medium enterprises (MSMEs) and small-time online sellers, but the “service providers from outside,” which include Netflix, Spotify, Facebook, Google, and other global Internet companies that conduct business in the country.
“They are gaining profit from us from our constituents and hindi sila nagbabayad ng tax (they are not paying the tax). While, kung dito ka nagbebenta (if you are selling here), nagbabayad ka ng tax (you are paying the tax). The objective of the bill is to level the playing field. If you are making profit from here selling to Filipinos, you have to pay taxes here,” Garin said.
Department of Finance (DoF) Assistant Secretary Daki Napao said the measure will generate P10.66 billion new revenues for the government – P9.31 billion from the foreign electronic transactions and P1.36 billion from local transactions.
