Philippines imposes 12 percent VAT on foreign digital services providers

The Philippine government has enacted a law imposing a 12 percent value-added tax (VAT) on foreign digital services providers like Netflix and Spotify. This law, signed by President Ferdinand Marcos Jr., requires these companies to decide if they will raise prices. Bureau of Internal Revenue Commissioner Romeo Lumagui Jr. stated that any price increase is up to the companies and may not reflect the full 12 percent tax. He noted that increases, if any, are expected to be minimal. The government anticipates generating 105 billion pesos over five years from this tax. A portion of the revenue will support local creative industries, while the remainder will be allocated to various sectors.