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An Albay Rep. Wants to Tax Your Netflix

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Albay Representative Joey Salceda wants to push through with the taxation of digital services, specifically video and music streaming applications, advertisements on social media platforms, and delinquent online shops. Salceda wants to call these new tax measures as “Netflix tax,” “Facebook ads tax,” and “Lazada tax.” 

 According to a report by the Philippine Daily Inquirer, Salceda wants these tax measures to help the government recover from the COVID-19 pandemic. This will offset an “estimated P120-billion in foregone revenues once the government cuts corporate income taxes to 25 percent to soothe the pain inflicted by COVID-19 on businesses.” 

"Netflix Tax"

Salceda wants the proposed “Netflix tax”, which will include other video and music streaming sites in the Philippines, to increase its current Value Added Tax (VAT) fees to 12 percent since the service tax globally is only 5 percent. According to Salceda, the current subscription fees of Netflix and Spotify do not have taxes imposed by the Philippine government.

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"Facebook Ads Tax"

Salceda also wants to impose a tax on digital advertisements to generate additional revenue under his proposed “Facebook ads tax”. A country representative for companies such as Facebook or Google can help facilitate this between companies and the government. 

"Lazada Tax"

When it comes to online shopping platforms, Salceda wants online marketplaces such as Lazada and Shopee to be responsible for its online sellers and suppliers under the proposed "Lazada Tax". He said that these online marketplaces should be the withholding tax agents of their suppliers, stating that only half of those offering their products and services pay VAT.    

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Once passed into law, he also wants these proposed new tax measures to be able to block any online and digital platforms if any of them fail to comply with taxation laws. The proposed “Netflix tax,” “Facebook ad tax,” and the “Lazada tax”—plus the pending Motor Vehicle User’s Charge and the taxation of Philippine offshore gaming operators—can all help keep revenue alive, Salceda said.

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Salceda says that the Philippine e-commerce sector can earn P260-billion this year, with a VAT collection totaling to P30-billion. 

This story originally appeared on Preview.ph.

* Minor edits have been made by the Esquiremag.ph editors.

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