MANILA — The Bureau of Internal Revenue (BIR) said Wednesday that the government's earnings over the tax it imposed on international digital services may reach up to P100 billion.

This, after President Ferdinand Marcos Jr. signed the bill into law, imposing a 12-percent value added tax (VAT) on foreign digital service providers.

New law imposes VAT on Netflix, other digital services

"In the next 5 years, ang nakikita natin base sa mga pag-aaral ay nasa mga P100 billion ang malilikom natin na koleksiyon dito," BIR Commissioner Romeo Lumagui Jr said in TeleRadyo Serbisyo's Johnson Ikwento Mo.

But where would the government spend the collections?

The commissioner said the newly signed law specified that 5 percent of the earnings from the VAT on foreign digital services would be allocated to the creative industry.

He, however, did not mention any other specific use for the remaining 95 percent of the earnings.

The official also said imposing taxes on foreign digital service providers is normal and that the Philippines is just catching up with other countries.

"Hindi po madi-discourage dahil actually kung tutuusin huli na tayo sa mundo sa pagpataw nitong VAT sa mga foreign digital service providers. Settled na po 'yan sa international community na kapag mayroong isang kompanya na kumikita sa ibang bansa, kasama talaga 'yan ng VAT at nandoon 'yung taxability niyan. As long as 'yung inyong services ay consumed doon sa bansang 'yun, lahat ng kita sa bansa na 'yon ay papatawan ng VAT dito sa atin," Lumagui said.

"Hindi po 'yan bago sa international o foreign digital service providers dahil kahit saang bansa sila mag-operate ay ganyan na po ang nagiging patakaran... As far as they are concerned, familiar na sila dyan at alam na po nila 'yan," he continued.

When asked if digital service providers would incorporate the tax in their current prices or will they increase their subscription fee to cope with the new law, Lumagui said that they are still unsure of it.

"Unang-una, I think hindi naman dapat tayo mangamba kung magkakaroon ng pagtaas ng presyo kasi alam na 'yan ng mga foreign digital service providers at kinakailangan nilang magbayad ng buwis dito sa atin. So kung ano man ang presyo na binigay nila, dapat alam nila na simula pa lang ay mapapatawan sila ng buwis dahil gano'n naman na 'yung ginagawa din sa mga ibang bansa kung saan din sila may presence. So pwedeng hindi rin talaga magtaas ng presyo," he said.

"Ngayon kung magtataas din naman sila ng presyo, tinitingnan natin na hindi naman gano'n kalaki ang magiging dagdag na presyo niyan. Baka siguro kaunting adjustment lang dahil gusto rin naman nila na ma-retain 'yung kanilang amount dyan para hindi sila mawalan din ng subscribers," Lumagui added.

The law was signed by Marcos Jr. on Wednesday, imposing a 12-percent VAT on foreign digital service providers such as streaming platforms Netflix and Amazon, as well as Google, Facebook and other foreign tech firms that provide services in the country.