HoR Approves Tax on Single-Use Plastics and Foreign Digital Services

The House of Representatives had approved the second reading of three priority tax measures, specifically implementing a tax on single-use plastic bags and foreign digital services, as well as giving tax exemption to pickup trucks.

“The measures could yield a total of P47 billion annually,”  mentioned Albay Rep. Jose Ma. Clemente S. Salceda, Chairman of the House Ways and Means Committee.

Rep. Salceda likewise stated that the ₱20 billion is predicted to be generated from the fourth package of the Comprehensive Tax Reform Program (CTRP) or House Bill No. 4339, from removing the tax exemption of pickup trucks and increasing the tax on foreign currency deposit units to 20%.

In response to the auto industry’s opposition to the removal of tax exemption, Rep. Salceda has said that it “merely corrects an unfair privilege on a vehicle that is mostly for the rich, occupies very large space on the road, and is by all accounts less fuel-efficient than most other vehicles.”

Aside from this, Rep. Salceda has mentioned that an estimated ₱19 billion can be generated from imposing a 12% value-added tax (VAT) on foreign digital providers like Spotify and Netflix.

“For the digital services VAT, it will not be imposed on Filipino businesses. The emphasis is on foreign or nonresident digital service providers. All major ASEAN (Association of Southeast Asian Nations) economies impose VAT on these entities. We’re the only ones that do not,” mentions Rep. Salceda.

If signed into law, the digital sale of services including on-demand video subscriptions, online advertisements, and other electronic services provided via mobile apps will likewise have tax.

Source: Business World