Smarter News Now
  • About Us
  • Privacy Policy
  • Terms & Conditions
  • Contact Us
  • Email Whitelisting
No Result
View All Result
  • Top News
  • Economy News
  • Forex News
  • Investing News
  • Stock News
  • Politics News
  • Editor’s Pick
  • Top News
  • Economy News
  • Forex News
  • Investing News
  • Stock News
  • Politics News
  • Editor’s Pick
No Result
View All Result
Smarter News Now
No Result
View All Result
Home Investing News

Digital tax may be difficult to implement, experts say

by
August 4, 2022
in Investing News
0
Digital tax may be difficult to implement, experts say
0
SHARES
17
VIEWS
Share on FacebookShare on Twitter
A smartphone with the Netflix logo is seen in this illustration taken March 24, 2020. — REUTERS/DADO RUVIC/FILE PHOTO

By Diego Gabriel C. Robles

THE PHILIPPINE government’s plan to impose taxes on digital transactions may be difficult to implement since it requires the voluntary compliance of foreign companies, experts said.

“Taxing digital transactions is a development that we cannot stop. Transactions are mostly digital and huge income are made and derived on the digital space. So, if the government wants to capture all businesses and impose tax on them, then the next big move is taxing the digital transaction,” said Eleanor L. Roque, head of the Tax Advisory and Compliance Division of P&A Grant Thornton in an e-mail.

President Ferdinand R. Marcos, Jr. signaled the administration’s intent to pursue a value-added tax (VAT) on digital service providers during his first State of the Nation Address on July 25. He estimated the tax will generate around P11.7 billion in revenues if implemented in 2023.

Many countries, including Vietnam, Thailand and Indonesia, began imposing VAT on non-resident digital service providers such as Netflix, Facebook and Spotify.

“We are actually late in this development. Various countries, including ASEAN (Association of Southeast Asian Nations) countries already approved laws during the pandemic imposing tax on digital transactions. So, we are just catching up on the developments in taxation,” Ms. Roque said.

Since the government needs to generate additional revenues, Ms. Roque noted it cannot ignore the taxes that digital companies should pay.

Tax Management Association of the Philippines, Inc. President Fulvio D. Dawilan said consumers have previously been able to “escape the burden of taxes” by making transactions on digital platforms.

“Even without a new law, digital transactions are supposed to be subject to taxes, except that there is difficulty in implementing taxation. Although there would still be challenges, the proposed law makes it clear that these are covered by our taxation rules and somehow provides mechanics on how the taxes can be collected,” he added.

Mr. Dawilan was referring to House Bill (HB) No. 7425 which was approved on third and final reading by the House of Representatives of the 18th Congress in September 2021.

Albay Rep. Jose Maria Clemente S. Salceda, chairman of the House Ways and Means Committee, refiled the measure as HB 372 last month. He said the measure seeks to “level the playing field between traditional and digital businesses.”

Under HB 372, all digital service providers with operations locally and abroad would be subject to a 12% VAT. This includes online advertising, subscription services, and the supply of other electronic and online services that can be delivered through the internet.

Foreign digital service providers, whose gross sales exceed P3 million, would be responsible for assessing, collecting, and remitting the VAT on transactions that go through their online platforms.

P&A Grant Thornton’s Ms. Roque said the P3-million threshold is too low, saying that it might cause administrative difficulties.

“Since we are talking about non-resident foreign corporations who will voluntarily register and comply with the payment of VAT, we can start with big companies who already [have] the means and technology to comply as they have been complying with other jurisdictions already,” she said.

“We don’t have to start with casting a wide net at this point. Let’s capture the big fish and then steadily widen our net as our regulators learn to fully implement the law.”

Both tax experts called for clearer guidelines with regards to when non-resident digital service providers are taxed.

“It will be very difficult for the government to capture all these transactions with foreign corporations especially if the client or buyer here in the Philippines is an individual who is not in business. So, I think it may be worth considering identifying big companies first so we can directly coordinate with them to ensure compliance,” Ms. Roque said.

Previously, Finance Secretary Benjamin E. Diokno said that the Department of Finance was already considering such tax, particularly on streaming services such as Netflix and Spotify.

“When you’re buying from regular stores, you include tax. So, why not include a tax on digital goods and services?” Mr. Diokno said during a press briefing at Malacañan Palace on July 6.

ShareTweetPin

Related Posts

Stocks decline on profit taking, recession fears
Investing News

Stocks decline on profit taking, recession fears

August 23, 2022
Peso climbs vs dollar as RTB offer starts
Investing News

Peso climbs vs dollar as RTB offer starts

August 23, 2022
PNR cancels bids for 3 projects after finding them ‘non-feasible’
Investing News

PNR cancels bids for 3 projects after finding them ‘non-feasible’

August 23, 2022
Senate grills Rodriguez on approval procedures for sugar import order
Investing News

Senate grills Rodriguez on approval procedures for sugar import order

August 23, 2022
Trade dep’t expecting sugar price monitoring report by Friday
Investing News

Trade dep’t expecting sugar price monitoring report by Friday

August 23, 2022
Fisherfolk seek halt to reclamation on municipal fisheries
Investing News

Fisherfolk seek halt to reclamation on municipal fisheries

August 23, 2022
Next Post
Foreign business groups, IATA disappointed with Marcos’ veto of transportation safety bill

Foreign business groups, IATA disappointed with Marcos’ veto of transportation safety bill

Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.
Email Address *
Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!
 

Recommended

AIA Philippines offers same-sex beneficiary inclusion

AIA Philippines offers same-sex beneficiary inclusion

July 26, 2022
Start Your Very Own Online Auto Trading Platform

Start Your Very Own Online Auto Trading Platform

June 27, 2022
Everything starts and ends with Steph

Everything starts and ends with Steph

June 12, 2022
Jollibee net earnings up nearly threefold to P2.8B

Jollibee net earnings up nearly threefold to P2.8B

August 11, 2022
Heatwave fee for Asia’s gig workers does little to cool climate stress

Heatwave fee for Asia’s gig workers does little to cool climate stress

July 21, 2022
PLDT, Smart activate more ‘Libreng Tawag, Libreng WiFi’ sites in quake-hit areas

PLDT, Smart activate more ‘Libreng Tawag, Libreng WiFi’ sites in quake-hit areas

July 28, 2022
  • About Us
  • Privacy Policy
  • Terms & Conditions
  • Contact Us
  • Email Whitelisting

Copyright © 2022 SmarterNewsNow.
All Rights Reserved.

Disclaimer: SmarterNewsNow.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice.
The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

No Result
View All Result
  • About Us
  • Contact Us
  • Email Whitelisting
  • Home
  • Privacy Policy
  • Terms & Conditions
  • Thank You

Copyright © 2020 SmarterNewsNow. All Rights Reserved.