After pushing it for quite some time, the Philippine government is nearing its goal of imposing a 12% value-added tax (VAT) on Netflix and other digital transactions.

The House Bill 4122 has been passed during the second reading after it’s been amended by the plenary. The bill wants to impose a 12% VAT on registered non-resident digital service providers (DSPs). However, those who provide services directly to the government are exempted and will only be charged 5% VAT.

Also exempted from the rule are education services like webinars and online courses of private companies, and a few others.


Meanwhile, the said amendments are yet to be made public. But before the changes, it is said that the goal is to level the playing field between the traditional and digital business entities by also imposing a VAT on the latter.

This will also help the government generate more revenues by gaining new sources. A previous report suggests that this new VAT will earn the government an additional Php11.7 billion in revenue.

The voting for the final approval of House Bill 4122 will happen in the coming days.

Other than Netflix, it should also affect other services like Spotify, Disney Plus, and other digital services and transactions.

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