BIR admits pricing of foreign DSPs to possibly be affected by VAT of Digital Services Act, allays concerns from consumers

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00:00The country's internal revenue services sees the newly minted 12 percent VAT

00:04on online merchants from abroad as a boom for the government's revenue collection.

00:09Not so much with typical Filipina customers who shop online and have enjoyed the affordable

00:15or reasonably priced products and services for the longest time

00:19and now face higher prices for such entitlements. Our Claizel Cordelia has more.

00:24From her shoes to her clothes and makeup, everything was purchased by

00:31Astread from various international online shops.

00:42But now Astread is concerned she will pay a lot more for the products she's enjoyed and bought.

00:47The Bureau of Internal Revenue will be implementing a 12 percent value-added tax

00:53on foreign digital service providers. This will impact electronic marketplaces and online shops

00:59owned by foreign entities as well as foreign streaming platforms like Netflix and HBO,

01:05which Adam loves.

01:07I'm super worried because my subscription is not just one app.

01:13I have three subscribers. If it's a time stream, my expenses will be high every month.

01:20According to a tax expert,

01:22We expect that subscription fees will immediately be increased by this new digital service tax.

01:31That means additional 12 percent.

01:34They will just pass it on to consumers.

01:37And since they are not registered here, they are not paying income tax here,

01:41so they won't let the new law affect their operations.

01:46The Bureau of Internal Revenue acknowledges that fees from foreign digital services providers

01:51may be affected. However, they assure consumers that there is no cause for alarm or worry.

01:57It's a business decision by the service providers.

02:01But again, they are already paying from the very beginning.

02:07So they should have incorporated the concept of VAT at the beginning during their pricing.

02:13So there may be a price increase, but again, I think it would be minimal.

02:19It's not like they will automatically increase 12 percent.

02:22Also commensurate and same rate.

02:24The new regulations will take effect 90 days after the implementing rules and regulations are published.

02:30It will help in turn in funding government projects, social welfare services, and infrastructure projects.

02:38So it will go back to us.

02:40The BIR warns that foreign digital service providers who do not comply with VAT payments

02:46will face fines and may have their websites blocked.

02:50Kalei zalpardilya for the new and better Philippines.

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