‘Former Bayan Muna Congressman Carlos Isagani Zarate criticized the Marcos administration for downplaying the potential impact of the newly enacted 12% value-added tax (VAT) on foreign digital services, asserting that consumers will ultimately bear the brunt of increased costs.
“Mr. Marcos, do not exacerbate further the economic hardships of the Filipino people with your Marcosianomics solution,” Zarate said.
In response to statements by the Bureau of Internal Revenue (BIR) claiming that the VAT will not significantly raise service fees or subscription prices, Zarate urged the government to stop misleading the public.
“Wag nang lokohin ng Marcos administration ang mga consumers dahil talagang ipapasa sa kanila ng mga digital companies ang tax na ito at siguradong magpapataas sa singil sa mga ito sa paggamit ng kanilang digital platforms,” Zarate said.
“Ang 12 % na VAT ay maaaring insignificant sa mga oligarchs, mga cronies at mga malalaking kapitalista, pero sa ordinaryong milyun-milyong Pilipino mabigat na dagdag pasanin ito sa araw-araw,” Zarate added.
The VAT, as stipulated in Republic Act (RA) No. 12023 signed by President Ferdinand Marcos Jr., affects major digital service providers like Netflix, Disney Plus, HBO, Google, and Amazon. While BIR Commissioner Romeo Lumagui Jr. suggested that price increases may not match the 12% VAT rate, Zarate emphasized that the international precedent shows consumers often absorb these additional costs.
Highlighting the broader trend, countries such as Singapore, Indonesia, Malaysia, and Thailand have already enacted similar digital tax laws, suggesting that digital companies would incorporate these taxes into their pricing.
However, Zarate pointed out that such measures could lead to higher expenses for Filipino consumers, who are already grappling with economic challenges.
The Department of Finance believes the new law will improve VAT collection from foreign digital service providers, but Zarate warned that without proper oversight, this could simply result in increased consumer costs without significant revenue benefits. He called for transparency and accountability from the government to ensure that the burden of taxation does not disproportionately fall on ordinary Filipinos.
Zarate challenged the Marcos Jr. administration instead to “stop all regressive taxation, and, in its place, pass the wealth tax for large income individuals and corporations.” #
