House Committee Approves Tax on E-commerce and Plastics

The House Committee on Ways and Means approved a proposal to implement an excise tax on plastic bags and digital platforms as well as simplify tax payments.

Committee Chairman, Albay Rep. Joey Salcedo mentioned that the  Digital Economy VAT,  the Ease of Paying Taxes Bill, and the measure imposing an excise tax on plastic bags were voted approved by his colleagues.

Under Rule 10, Section 48 of the House of Representatives, these measures are eligible for fast approval since these bills were approved on the third and final reading in the Lower House during the 18th Congress.

Rep. Salceda highlighted that the Digital Economy VAT law will address grey areas in the VAT system that have permitted some digital goods and services sold online to stay outside the scope of the VAT coverage.

He also said that once this bill is officially implemented, this would generate around ₱154 billion in revenues for the government for the next five years.

This proposal aims to implement a 12% VAT on digital services like Lazada, Spotify, and Netflix.

However, Assistant Minority Leader and Gabriela Partylist Rep. Arlene D. Brosas have advised against new pass-on charges to the consumers of these online platforms and services once VAT is imposed.

“While we need to level the playing field in the digital economy, the such aim should not be at the expense of ordinary Filipinos relying on various digital platforms and services,”  said Rep. Brosas.

“We cannot be comforted by the assurance that there will be no pass-on charges supposedly because the digital tax will be credited as tax compliance in the platform’s origin country,” she adds.

Source: Business Mirror