- The Philippines should align its proposed value-added tax (VAT) on digital transactions with international standards.
- The Asia Internet Coalition (AIC) is urging lawmakers to carefully consider the provisions of the VAT proposal.
- The government aims to amend the Tax Code and impose a 12 percent VAT on digital transactions to increase state revenue and create a level playing field.
- The AIC believes that the VAT proposal should align with internationally agreed standards and global best practices.
- The AIC emphasizes the importance of consistency, efficiency, certainty, and simplicity in the VAT taxation policy framework.
- Estimates from the Department of Finance (DOF) suggest that the 12 percent VAT can generate additional revenue of P96.72 billion over the next five years.
- The DOF assumes a collection efficiency of 50 percent in the first year of implementation, increasing to 70 percent by 2025.
- The tax system in the Philippines currently does not cover the digital economy, resulting in missed revenue opportunities.
- The proposed VAT on digital transactions is in the advanced stages in the upper chamber.
Source: philstar.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
