The House committee on ways and means, chaired by Albay Rep. Joey Sarte Salceda, announced on Wednesday that its draft committee report for digital taxation is nearing completion.
The technical working group, headed by tax panel vice chair Sharon Garin, has convened a series of meetings to thresh out the details of the committee’s proposal to extend coverage and close loopholes of the country’s value-added tax (VAT) system in the digital economy.
“As I have always emphasized, there are no new taxes here. We are just closing loopholes that could threaten revenue integrity more as the digital economy grows bigger,” Salceda said.
“Our policy is simple. Facebook, Google, and other major global internet companies are making money off of Filipinos, without sharing in the costs of transforming this country’s economy into a more digital economy,” he said.
“They benefit from our country’s taxpayer-funded efforts, but they are not sharing enough in the effort. Mind you, digital transformation is costly. It requires ICT infrastructure and investments in innovation. Given these costs, there should be no free money for giants,” he added.
Salceda authored House Bill 6765, or the Digital Economy Taxation Act, which introduces amendments to the tax code to clarify ambiguities about whether digital services such as online advertising, and subscription-based digital services, are subject to VAT.
The bill also explores mandating key conduits in the digital economy as withholding agents for VAT.