Salceda: Taxing digital purchases to lay down e-commerce rules

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Metro Manila (CNN Philippines, August 7) — A House leader said the 12% value-added tax on digital purchases will lay down e-commerce rules as early as possible even during the pandemic.

"Alam mo (You know), this is one of the portions of the economy that's actually rising very fast. And therefore, the earlier you're able to put them in the regular domain of taxation, it's far better," Ways and Means Committee chairman Joey Salceda told CNN Philippines' The Exchange.

"It's sending a very strong positive signal to the rest of the world that the Philippines is preparing for the digital economy by putting already our regime that will regulate our digital economy," he added.

The House panel approved the proposal seeking to tax online service providers conducting operations virtually in late July at a time when more Filipinos are into digital transactions amid the COVID-19 pandemic.

Senator Grace Poe rejected the bill, saying this might discourage micro, small and medium enterprises (MSMEs) trying to make ends meet amid the pandemic from using online platforms.

Salceda, however, clarified MSMEs aren't the target of the tax but rather big companies like Google, Facebook, Lazada and Netflix. He added hat those with annual net income below ₱250,000, sell goods or have assets less than ₱3 million are exempt from paying VAT.

Netizens also voiced out concerns against the bill, noting that the pandemic is a bad time to impose more taxes.