Philippines proposes tax on Netflix, Facebook ads, Lazada purchases amid coronavirus pandemic
- The measures would raise US$593 million and help to offset government spending to fight the Covid-19 pandemic, Congressman Joey Salceda says
- Some Filipino business owners have criticised the plans, saying the authorities should instead go after online gaming firms catering to Chinese gamblers
Philippine lawmakers have proposed a tax on digital platforms from Netflix to Facebook and Shopee, as it moves to expand government coffers by tapping into the country’s growing digital economy that got a boost as people stayed home during the 66-day coronavirus lockdown period.
Congressman Joey Salceda, who chairs the powerful Committee on Ways and Means in the House of Representatives, said on Tuesday the new tax measures would raise 30 billion pesos (US$593 million).
This could “plug” revenue losses when another proposed law to reduce corporate tax from 30 to 25 per cent kicks in, and will also offset government spending of 275 billion pesos (US$11.7 billion) during the pandemic.
Salceda, former research chief of global bank Ing Barings, claimed House Bill 6765 would merely plug “loopholes” by “establishing a fiscal regime for the digital economy”.
He noted that advertisements on Facebook and Google and half of the vendors selling goods on Lazada, Amazon and Shopee to Filipinos do not pay the 12 per cent value-added tax (VAT) that local bricks-and-mortar retailers do.