President Bongbong Marcos has signed into law Republic Act No. 12023, which imposes a 12% value-added tax (VAT) on foreign digital service providers (DSPs), regardless of whether they have a physical presence in the Philippines.
These DSPs include e-commerce companies and streaming platforms such as Netflix, Disney+, and HBO, among many others.
A priority legislation of the current administration, R.A. No. 12023 or the “Value-Added Tax (VAT) on Digital Services Law” does not introduce new taxes; rather, it aims to level the playing field for local providers and generate additional revenue to fund government projects, according to Marcos.
“With this law, we say that if your presence in the Philippine market is as real as your profits, then your tax responsibilities should also be equally tangible. If you are reaping the rewards of a fruitful digital economy here, it is only right that you also contribute to its growth,” he said during the ceremonial signing at the Malacañan Palace.
Over the next five-year period following the passage of the law, Marcos said the government eyes to collect around P105-billion revenues, which will be used in building at least 42,000 classrooms, more than 6,000 rural health units, and 7,000 kilometers of farm-to-market roads.
Further, 5% of the total revenues will be allocated to the Philippine creative industry’s development.
“This means our artists, filmmakers, musicians, the very people who fill our platforms with storage and the content, will directly benefit,” Marcos said, adding that “it ensures that our creative talents are not just surviving in a competitive digital market, but will be allowed by fairness and progress.”
Jennibeth Reforsado4 hours ago
