- The digital economy is reshaping global trade, with digitally delivered services valued at $3.82 trillion in 2022, constituting 54% of all services traded and growing at 8.1% annually since 2005, prompting governments to seek new tax revenues from this sector.
- Countries are increasingly implementing tax measures targeting digital transactions, particularly from non-resident providers, to ensure equitable taxation; however, these measures may lead to higher prices for consumers and added compliance burdens for foreign businesses.
- Recent developments include Manitoba’s extension of retail sales tax to cloud services in 2026, the Philippines enforcing a 12% VAT on foreign digital services starting June 1, 2025, and changes in South Africa that exempt non-resident providers serving VAT-registered businesses, while the Dominican Republic has yet to pass digital tax legislation.
Sources
See also
- South Africa Revamps Digital Services VAT Regime in 2025
- Sri Lanka’s New VAT on Foreign Digital Services: Impact and Implementation
- Dominican Republic 2025 18% VAT foreign digital services
- Philippines to Implement 12% VAT on Digital Services from 1 February 2025
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