The House of Representatives has opened plenary deliberations on House Bill 4122 or the proposed value-added tax on non-resident digital service providers (DSPs).

House Ways and Means Committee Chair Joey Salceda said the measure has several provisions including requiring nonresident DSPs to collect and remit the VAT on the transactions that pass through their platform. It also requires them to register for VAT if gross sales or receipts for the past year have exceeded P3 million.

Salceda said the measure "could generate at least P12 billion in incremental revenues."

He said the Philippines imposes taxes on the production and release of these digital services here, but not on foreign service providers.

"In fact, Filipino Youtube content creators are withheld a 30 percent tax by the US Government, much higher than our own Personal Income Tax rates."

Meanwhile, the country does not impose "a single cent in taxes" on these companies, Salceda said.

He said that the Philippines is the last major ASEAN economy that does not impose a VAT or GST on nonresident digital service providers.

"Singapore, Malaysia, Thailand, Indonesia, and Vietnam all impose VAT or GST on these entities. Nearly all of them did so on January 2020. Vietnam is imposing its VAT on digital service providers starting January 2022," Salceda said.

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