President Marcos has signed into law Republic Act (RA) No. 12023 or the Value Added Tax (VAT) on Digital Services Law which imposes a 12-percent VAT on digital service providers (DSPs) to level the playing field for local providers and generate additional revenue that will be used to build more classrooms, health centers, and farm-to-market roads in the next five years.
READ MORE: https://mb.com.ph/2024/9/28/PBBM-signs-digital-services-VAT
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READ MORE: https://mb.com.ph/2024/9/28/PBBM-signs-digital-services-VAT
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NewsTranscript
00:00The President may now proceed to sign the enrolled copy.
00:05Upon signing of the harmonized version of House Bill No. 4122 and Senate Bill No. 2528,
00:12it shall be known as Republic Act No. 12023 and titled,
00:18An Act Amending Sections 105, 108, 109, 110, 113, 114, 115, 128, 236, and 288
00:29and adding new Sections 108A and 108B of the National Internal Revenue Code of 1997 as amended.
00:38This measure imposes value-added tax on nonresident digital service providers,
00:44except for educational services including online courses and webinars
00:48and sale of online subscription-based services to educational institutions
00:54purposively to generate additional revenue for the government
00:58and at the same time, level the playing field for local providers that are covered by the existing VAT regime.
01:05Thank you, Mr. President.
01:07The rapid change in our digital landscape has created a gap in our tax system.
01:17Today, we signed the Value-Added Tax and Digital Services Law and we are now bridging that gap.
01:24With this law, we say that if your presence in the Philippine market is as real as your profits,
01:31then your tax responsibility should also be equally tangible.
01:36But make no mistake, we are not imposing new taxes.
01:40We are simply strengthening the authority and streamlining the process of the BIR
01:45to collect value-added tax on digital services.
01:49This includes digital media, digital music, digital video, video on demand, and digital advertising.
01:58Local businesses and international digital platforms now compete on equal terms.
02:04We no longer will be playing by different sets of rules.
02:09If you are reaping the rewards of a fruitful digital economy here,
02:13it is only right that you contribute also to its growth.
02:27For more UN videos visit www.un.org