The value-added tax (VAT) on digital media and advertising is expected to bring the government P102.12 billion in 2029, the Department of Finance (DoF) said.ffisaid cial.
“We hope that… more DSPs (Digital Service Providers) will comply, so that we can really reap the benefits of this initiative,” DoF director and Representative of the Organization for Economic Co-operation and Development Euvimil Nina R. Asuncion told reporters on the sidelines of Wednesday’s event.
Republic Act No. 12023, which imposes a 12% value-added tax on digital service providers, both resident and non-resident, was signed into law in October.
The DoF expects to collect P7.25 billion in 2025 in VAT from DSPs and P21.37 billion the following year.
In 2027, it plans to collect P22.81 billion, followed by P24.42 billion in 2028, and P26.27 billion in 2029.
Estimates assume that 80% of the tax base represents non-resident DSPs, while 20% comprises resident DSPs.
Non-resident DSPs must pay a VAT rate of 12% as they are deemed to have no input VAT.
Meanwhile, resident DSPs are subject to a total VAT rate of 7% as they are deemed to have an input VAT of 5% of the tax base.
Ms. Asuncion said the VAT on DSPs is expected to go into effect on May 16, and the revenue regulations will be issued on Jan.
VAT on digital services portals is also scheduled to go live on March 31.
The targets of the Development Budget Coordinating Committee took into account the revenue projections from the DSPs, noted Ms. Asuncion.
He also said that DSPs could be expected to increase subscription prices, but added that any increase would not be large.
“For very small subscribers, we see a very small increase in value if they follow the VAT rate of 12%,” he said. – Aaron Michael C. Sy
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