Andrea Taguines

ABS-CBN News

MANILA (UPDATE) - The new law imposing a 12-percent Value Added Tax (VAT) on foreign digital service providers will likely result in higher fees for users once it takes effect, a tax expert said on Thursday.Bureau of Internal Revenue (BIR) Commissioner Romeo Lumagui Jr. earlier said that affected companies may not necessarily resort to increasing their charges significantly, as this may discourage customers from availing of their services. The impact could also be &quot;minimal,&quot; he said.&quot;Sa ibang bansa nagbabayad na sila [digital streaming companies] ng buwis. So dito, huli na nga tayo kung tutuusin. Alam na nila &#x27;yan, so siguro naman no&#x27;ng nag-impose sila ng pricing niyan, alam nila na masa-subject sila sa VAT. So pwedeng hindi naman tumaas ang presyo niyan, pero of course hindi natin maga-guarantee na hindi tataas ang presyo,&quot; Lumagui said on &quot;Bagong Pilipinas Ngayon&quot; program.Lumagui also said that the 12-percent VAT won&#x27;t necessarily translate to a 12-percent increase in subscription fees.The BIR chief said the public will know if there will be fee hikes next year after the implementing rules and regulations of the new law are released.&quot;Hindi natin masabi if talagang magtataas ng presyo &#x27;yan,&quot; Lumagui added.But Mon Abrea, the founding Chairman and CEO of the Asian Consulting Group, believes otherwise.“It’s a welcome development to expand the coverage of the Value Added Tax. Ang talaga lang caveat dyan, it has (an) unintended consequence e, the price increase. Ba’t naman nila ia-absorb yung 12-percent VAT, diba? It will be a reduction to their margin e,” said Abrea.<div><iframe width="640" height="360" src="https://www.youtube.com/embed/CCYBDXD16IE?&amp;wmode=opaque&amp;rel=0" frameBorder="0" allowfullscreen="" class="fr-draggable"></iframe> </div>“Kung halimbawa, yung Netflix subscription is P500. Magdadagdag lang sila ng 12 percent so magiging P560,” he added.Netflix user and Korean drama fan Grace Misajone said she would still choose to continue her subscription even if it means a more expensive monthly fee.“Tutuloy ko pa rin. Pang-stress relief din siya tapos nakakalimutan mo yung mga iniisip mo. For relaxation after work,” she said.But marketing manager Ronjay Eduvas is hoping the possible adjustment in rates will not be too big so he can continue to use his cloud storage for work.“Hindi na uso yung USB. Talagang kung di naman masyadong malaki yung file, convenient talaga na you put it on cloud or email mo nalang yung link so mas madali sa mga tao,” he said.Abrea also noted that the implementing rules and regulations of the law should include a clear mechanism on how the BIR will collect the VAT and how it will be allocated to benefit the local creative industry.“Halimbawa, hindi sumunod si Google. Kasalanan ba natin, dahil nag-transact tayo kay Google, (na) hindi siya nag-issue ng invoice, hindi siya nag-charge ng 12 percent? Hindi dapat burden nung domestic or local users… Mamaya magbayad tayo ng additional 12 percent, tapos hindi pa rin makolekta ng government. Talo tayo doon diba?” he said.According to the BIR, it is already working on a convenient way for foreign digital service providers to register for the VAT regime. Lumagui also said that the government received positive feedback from popular digital service providers during their consultations.“They committed na magco-comply sila sa batas na ‘to at magre-register so we’re hoping na magiging mataas ang compliance nito,” he said.ABS-CBN News has reached out to several foreign digital service providers for their thoughts on the measure but they have yet to respond. But as early as now, the BIR has warned that those who will not comply with the law can be suspended or blocked in the Philippines.<div> </div>

The new law imposing a 12-percent Value Added Tax (VAT) on foreign digital service providers will likely result in higher fees for users once it takes effect, according to a tax expert.

The new law imposing a 12-percent Value Added Tax (VAT) on foreign digital service providers will likely result in higher fees for users once it takes effect, according to a tax expert.

VAT on Netflix, other foreign digital services to result in higher fees: expert | ABS-CBN

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VAT on Netflix, other foreign digital services to result in higher fees: expert

VAT on Netflix, other foreign digital services to result in higher fees: expert

Andrea Taguines,

ABS-CBN News

Published Oct 03, 2024 07:03 PM PHT

|

Updated Oct 03, 2024 07:56 PM PHT

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VAT

BIR

Mon Abrea

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foreign digital services

Romeo Lumagui

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