Tax on Netflix, other digital services? DOF's Diokno says it's only fair

Job Manahan, ABS-CBN News

Posted at Jul 06 2022 07:35 PM | Updated as of Jul 06 2022 11:06 PM

MANILA — The administration of President Ferdinand Marcos Jr will look to tax digital services and do more projects involving the private sector, Finance Secretary Benjamin Diokno said on Wednesday. 

The new Finance chief was quoted in May that he was seeking to tax digital transactions and streaming services such as Netflix. Several lawmakers have also filed bills aiming to tax companies such as Spotify, Amazon, Facebook and Google.

During Wednesday's palace briefing, Diokno said taxes on digital services was based on the principle of "fairness." 

"Yung tax on digital services, it is only fair na ita-tax natin 'yon. If you are buying it from the regular stores, nagta-tax ka, ay bakit naman kapag digital hindi ka nagta-tax?" Diokno told reporters in a press briefing. 

(The tax on digital services, it’s only fair that we tax them. If you are buying it from regular stores, you get taxed, so why shouldn’t digital also get taxed?)

"I think in the sense of fairness, dapat magkaroon ng tax especially medyo, if you think about it, yung mga nakakaangat yung nakakakuha ng ganyan, yung digital payments," he added. 

(I think in terms of fairness, there should be a tax [on digital services] especially if you think about it, it’s those who are better off who avail of those, with digital payments.)

In May this year, the Department of Finance proposed excise taxes for single-use plastics, tax for cryptocurrencies, and VAT on digital services providers. 

The DOF then said the new taxes were "critical" so the government can generate P349 billion in new revenues between 2023 and 2027 to help trim the country's trillion debt, which was P12.5 trillion as of May. 

Aside from this, the finance chief said there were 2 more tax reform program packages left to be implemented from the previous administration, which could "simplify a lot of the tax systems."

"We will push for that and we expect that to be approved at the end of the year and it would be implemented next year," he said. 

PUBLIC-PRIVATE PARTNERSHIPS 

The Marcos administration is also planning to shift to public-private partnerships (PPP), said Diokno. 

The push for PPP will also enable the government "enlarge fiscal space" and enable it to spend "only a fraction" for the projects.

At present, he said, there are 88 to 89 "major projects ready to go" for PPP. 

"Shovel-ready na 'yun," the official said of PPP projects. 

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Diokno said the Marcos administration plans to spend 5 to 6 percent of GDP on infrastructure annually from 2023 to 2028.

"I think we encourage them to come in and maybe choose some of the projects or develop their own and we will welcome the PPP arrangement -- not only at the national level but also at the local level," he noted.

"There are some local governments, some cities who have the money to enter into these kinds of arrangement."

Socioeconomic Planning Secretary Arsenio Balisacan had said he would "reinvigorate" PPP under Marcos, noting the importance of the private sector.