House passes bill imposing 12% VAT on digital transactions

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Metro Manila (CNN Philippines, September 21) – The House of Representatives has passed on third and final reading a bill imposing a 12% value added tax (VAT) on digital transactions.

167 congressmen voted on Tuesday to pass House Bill No. 7425. Six voted against the measure while one abstained.

Covered in the imposition of the 12% VAT on digital transactions are subscription-based video and audio streaming services, online advertising services, and other online electronic services.

An additional 5% VAT will be imposed on registered but non-resident digital service providers, which render services to the government.

The bill requires digital service providers to register for value added tax if their gross sales exceeded ₱3 million during the past year.

Under the measure, books and other printed materials sold online are exempted from VAT.

Its counterpart bill in the Senate is still pending at the committee level.

CNN Philippines correspondent Xianne Arcangel contributed to this report.