Simply justified in two words it’s the “new
normal.”
As the country tries to adapt to the new norm
for the society brought about by the coronavirus pandemic, so should we also
think of new ways to go about regarding our survival as a nation.
And since taxation has been dubbed as the
lifeblood of any government, Albay representative Joey Salceda, the House of
Representative ways and committee chair is pushing for a new source of industry/sector
that can be taxed by the government for the country’s national treasury.
(photo credit to owner) |
Salceda is proposing to a taxation scheme for
all digital services - specifically, subscriptions to video and music streaming
apps, ads on social media sites, and making online sales platforms as
withholding tax agents— with the rationale of
offsetting the P120 billion in foregone revenues once the government cuts
corporate income taxes to 25 percent to soothe the pain inflicted by COVID-19
on businesses.
Salceda intends to call these new tax measures
as “Netflix tax,” “Facebook ads tax,” and the "Lazada Tax", respectively.
Salceda makes an example of the “Netflix Tax”,
the worldwide current standard digital services tax slapped on subscriptions
worldwide was 5 percent, although in Chile is much higher at 19 percent.
If the Philippine would slap a new 12-percent
tax on subcriptions to video and music streaming sites, its worthy to note that
said market is worth about P5 billion.
For “Facebook ads tax,” Salceda said the idea was to “require that digital advertisements be made through a country representative of Facebook and Google so it becomes least problematic.”
For “Facebook ads tax,” Salceda said the idea was to “require that digital advertisements be made through a country representative of Facebook and Google so it becomes least problematic.”
As of the moment the country does not have any
scheme to levy any tax on the subscription fees being collected by apps like
Netflix or Spotify.
Salceda reasons out that if the country would
levy a 12-percent value-added tax (VAT) and corporate income tax among digital
advertisers will augment the current revenue base
“The big money is in finding a way to tax the advertising on Facebook and Google,” Salceda said,
“The big money is in finding a way to tax the advertising on Facebook and Google,” Salceda said,
These two tech giants currently dominates the
country’s internet space.
For the “Lazada tax,” the solon noted that
only 50 percent of vendors who sell their goods and services via online
marketplaces like the Alibaba Group’s Lazada, Amazon, and Shopee, among others,
pay VAT.
Among online sellers, “around half are
fully-compliant [with VAT payments] since they are large taxpayers and
accredited shops,” he said.
Salceda bats for the 50% non paying VAT online platforms to be tapped to also serve as the withholding tax agents of their suppliers.
To put things in perspective , the sales of
the country’s e-commerce sector estimated to reach about P260 billion this
year, VAT collections should reach around P30 billion, Salceda said.
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