Don’t worry about 12% VAT on digital services, consumers told

The Value-Added Tax (VAT) on Digital Services Law has no major effect on their subscription to digital platforms, Bureau of Internal Revenue (BIR) Commissioner Romeo Lumagui Jr. has assured consumers.

“Unang-una hindi po dapat tayo mangamba dito sa VAT on Digital Service Providers because unang-una napakaganda ng layunin ng batas,” Lumagui said in a Palace briefing on Wednesday, Oct. 2.

He explained that the collection of VAT from foreign Digital Service Providers (DSPs) is expected to level the playing field for local and foreign businesses, allowing the government to collect taxes from foreign businesses.

While there might be an increase on the prices of DSPs services, the BIR chief said it would be minimal. 

It’s also not going to be commensurate with the implementation of the 12 percent VAT, he furthered.

“Hindi naman natin in-expect na magiging malaki ang pagtaas ng presyo nito kung magkakaroon man. And ang tinitingnan nga natin baka naman posible rin, malaki rin naman ang chance na hindi rin naman magtaas ang presyo ng mga produktong ito,” said Lumagui Jr.

He also said the VAT collection from foreign service providers would help protect local businesses and generate revenue for government projects benefiting Filipinos.IMT