Philippines: House Panel approves VAT Bills for digital transactions
The House of Representatives approved House Bill nos. 4102, 4122, and 4339. House Bill no. 4122 intends to impose VAT on all online sales or electronic services transactions.
Approved bills are as follows:
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House Bill 4122
The bill requires all nonresident digital service providers (DSP) to collect and remit VAT on the transactions that pass through their platform at a 12% rate. The legal implementation of imposing VAT applies to:
- electronic sales,
- advertising services online,
- digital services that require a subscription fee, and
- other services supplied through the internet.
On the other hand, educational services such as online courses, webinars, or private institutions are VAT exempt.
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House Bill 4102
The bill will charge single-use plastic bags with an excise tax of PHP 100 per kilogram, with a 4% increase each year starting on 1 January 2026. The Philippines is currently recognized as the world’s leading contributor to ocean plastic waste. The measure is in line with the country’s initiative to address pollution.
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House Bill 4339
This bill is also known as the proposed Package 4 of the Comprehensive Tax Reform Program which
- intends to increase rates on foreign currency deposit units to 20% and
- remove the pickup truck tax exemption which addresses an “unfair privilege” on a vehicle that is mostly for the rich and occupies a very large space on the road.
The new annual revenue growth is anticipated to reach at least PHP 47 billion for the country. Furthermore, he specifically stated that the:
- VAT for nonresident digital service providers would generate PHP 19 billion,
- Single-use plastic bag tax would generate PHP 9.3 billion, and
- Package 4 would generate PHP 20 billion.
Source: pna.gov.ph
