Governor Benjamin Diokno of the Bangko Sentral ng Pilipinas (BSP) wants to remove the 12% value-added tax (VAT) on online transactions that are less than Php500.
As per Diokno, the VAT exemption on small value transactions will help promote digital financial dealings in the country.
During the Laging Handa briefing last Friday, Diokno praised the value-added tax but encourages small transactions to be exempted from it.
Back in September, the House Bill 7425, which will put a 12% VAT on digital transactions, has been approved by the House of Representatives.
Meanwhile, the BSP has always been promoting the use of digital transactions in the Philippines. Last year, due to the health crisis, online transactions have boomed as more people patronize online businesses.
PESONet and InstaPay are two electronic payments facilities under the BSP’s National Retail Payments Systems (NRPS). PESONet already garnered 31.6 million in transactions in the first half of 2021. That’s a 164% YoY growth. On the other hand, InstaPay had 201 million or a 223% increase over the same period last year.
As of now, there are 87 financial institutions that use PESONet and InstaPay services.