Albay Representative Joey Salceda wants to tax digital services, specifically video and music streaming applications, advertisements on social media platforms, and delinquent online shops. Salceda wants to call these new tax measures as “Netflix tax,” “Facebook ads tax,” and “Lazada tax.”
According to a report by the Philippine Daily Inquirer, these tax measures will offset an “estimated P120 billion in foregone revenues." This is in connection with the "government cuts on corporate income taxes to 25% to soothe the pain inflicted by COVID-19 on businesses.”
"Netflix Tax"
Salceda wants the proposed “Netflix tax”—which will include other video and music streaming sites in the Philippines—to increase its current Value Added Tax fees to 12% since the service tax globally is only 5%. According to Salceda, the current subscription fees of Netflix, and even Spotify, do not have taxes imposed by the Philippine government.
"Facebook Ads Tax"
Salceda also wants to impose a tax on digital advertisements to generate additional revenue under his proposed “Facebook ads tax.” A country representative for companies such as Facebook or Google can help facilitate this between companies and the government.
"Lazada Tax"
When it comes to online shopping platforms, Salceda wants online marketplaces such as Lazada and Shopee to be responsible for its online sellers and suppliers under the proposed "Lazada Tax." He said that these online marketplaces should be the withholding tax agents of their suppliers, stating that only half of those offering their products and services pay Value Added Tax (VAT).
Once passed into law, he also wants these proposed new tax measures to be able to block any online and digital platforms if any of them fail to comply with taxation laws. The proposed “Netflix tax,” “Facebook Ads tax,” and the “Lazada tax”—plus the pending Motor Vehicle User’s Charge and the taxation of Philippine offshore gaming operators—can all help keep revenue alive, Salceda said.
Salceda says that the sales of Philippine e-commerce sector can hit P260 billion this year, with a VAT collection reaching P30 billion.
This story originally appeared on Reportr.World. Minor edits have been made by the SPOT.ph editors.
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