Over Php100 billion in digital service VAT is expected to be collected by the Philippine government over the next five years.

Should it begin levying on digital service providers (DSP), the Department of Finance (DOF) anticipates earning Php101.76 billion over the course of five years, from 2024 to 2028.

During the Senate Public Committee on Ways and Means hearing on Thursday, DOF Undersecretary Dakila Napo said that the government is aiming to tap into the resource as a method to expand its socio-economic programs.

Napo predicts a collection of Php17.64 billion in 2024 alone, highlighting an expected government revenue from the tax of Php18.96 billion in 2025, Php20.25 billion in 2026, Php21.63 billion in 2027, and Php23.28 billion in 2028. This is assuming that at least 70% of DSPs comply with their tax obligations.

However, it is predicted that the total accumulated sum will increase to Php145 billion in the same time if all DSPs are fully complied with. In addition to banners, audio, classifieds, search, influencers, and video under digital advertising, the DOF listed DSPs as being connected to video games, digital music, and video-on-demand under the heading of digital media.

House Bill No. 1422, approved in November 2022, charges foreign digital service providers like Spotify and Netflix a 12 percent VAT. The law also handles VAT on sales of services made online or electronically, such as membership fees and digital advertising. Pia Cayetano, a senator, is in favor of taxing the internet economy. advertising.