Senator Sherwin Gatchalian said on Tuesday that the Senate is eyeing a measure to impose a value-added tax (VAT) on digital services like Netflix and Disney Plus, among others, for the government to collect up to P145 billion in VAT from 2024 to 2028.

Leading the Senate committee during the Kapihan sa Senado, Gatchalian said that his panel is now finalizing the VAT on digital services, clarifying that it is "not a new tax measure", and confirmed that they target passing the said measure within this year.

He explained that buying things or goods in the Philippines has a 12-percent VAT as the buyers look at their receipt, so when people subscribe to Vivamax, there is a 12-percent VAT on all local corporations, goods and services, as well as digital goods and services.

Vivamax is a subscription-based video-on-demand app that contains blockbuster Filipino and foreign films, television series, documentaries, concerts, stand-up comedians, fitness and workout shows, sports, and genre-bending exclusives.

The Senator, on the other hand, stated that the problem is that non-residents and foreigners are not included or covered under the country's tax code, creating "a gap."

Gatchalian stated that he was set to meet with officials from the Bureau of Internal Revenue (BIR), which is in charge of implementing the VAT on digital services measure.

While presiding over a public hearing on VAT on digital services on July 6, the Senator stated that he had more concerns for the BIR, noting that while the law is sound, the issue is its execution.

He said that the Philippines is trailing behind the rest of the region, with seven of the ten members of the Association of Southeast Asian Nations already imposing VAT on foreign digital service providers and roughly 120 other nations across the world doing the same.

Last year, the House of Representatives passed a similar bill.