The official enactment of taxes on digital goods and services from international providers took place on Wednesday as President Ferdinand Marcos Jr. signed Republic Act 12023, the Value-added Tax on Digital Services Law, during a ceremony at Malacañang.
Under the new law, a 12% VAT will be applied to online transactions made by Filipinos with non-resident digital service providers, including platforms like Netflix, to generate additional revenue for the government.
In his speech, Marcos emphasized the need to address the gaps in the taxation system created by digital services.
“If you are reaping the rewards of a fruitful digital economy here, it is only right that you contribute also to its growth,” said Marcos.
“After all, whether you are a small tech start-up or a global tech giant based halfway around the world, if you are making money here in the Philippines, you are part of our community and with that comes a shared responsibility,” he added.
Educational digital services are excluded from the taxation provisions of the VAT on Digital Services Law.
"We have been precise about where this tax applies. Sparing educational and public interest services from its coverage," Marcos mentioned.
Marcos reiterated that online courses, webinars, and other digital offerings will be exempt from VAT to ensure that education remains affordable and accessible to all Filipinos.
The President conveyed his gratitude to the lawmakers for the measure's passage and urged companies covered by the law to respect its rules.
