VAT on foreign digital services to be signed into law on Oct. 2 —DOF

The Congress-approved measure seeking to impose a 12% value-added tax (VAT) on digital services provided by foreigners is expected to be signed into law by President Ferdinand Marcos Jr. next month, a top official of the Department of Finance (DOF) said Wednesday.

Citing developments during the Legislative Executive Development Advisory Council meeting attended by Finance Secretary Ralph Rector, DOF Undersecretary Domini Velasquez said, “One of the good news I heard from the meeting was the VAT on digital services providers will be signed on October 2.”

This was disclosed by Velasquez during the Management Association of the Philippines’ (MAP) General Membership Meeting in Taguig City on Wednesday.

In June, lawmakers approved the harmonized version of House Bill 4122 and Senate Bill 2528 during the bicameral conference.

The reconciled version of the bill seeks to slap a 12% VAT on digital transactions by non-resident digital service providers such as Netflix, Disney and HBO.

In her presentation, Velasquez said that the VAT on non-resident digital service providers could generate P79.5 billion in revenues for the government for the period 2025 to 2028.

Recto had earlier expressed confidence that the President will sign the measure into law, noting that the DOF along with its attached agencies are already preparing to craft the law’s implementing rules and regulations.

“Alam namin magiging batas ‘to at pipirmahan ng Pangulo ‘to…Sinusuportahan namin 'to (We know this will become a law and the President will sign it into law… We are supporting it),” the Finance chief said.  —RF, GMA Integrated News