THE Department of Finance (DOF) said it is studying how to better implement tax collection on internet streaming as well as e-commerce activities to capture value added tax (VAT) leakages from online transactions.
Carlos Dominguez, DOF secretary, said in a virtual Senate hearing yesterday the government has yet to come up with an estimate on the total amount of transactions made online.
“Yes, we have started the study on improving our tax collections on video streaming (and) on commerce conducted through the internet,” Dominguez said.
“What we are trying to figure out is how to implement the tax collection program. So right now, our team from the BIR (Bureau of Internal Revenue) and DOF is working very hard to determine this, the way to tax transactions that have that are supposed to be taxed, that are escaping taxation, because they are on the internet,” he added.
Dominguez said, for instance, purchasing an item from a physical store comes with VAT.
“But if you buy it from (for example,) Lazada, there is no VAT charge,” Dominguez said.
“So we are figuring out how to do this. Also for internet streaming, how are we going to identify the transactions and the amounts involved,” he added.
Dominguez said the DOF will report to the Senate as soon as it comes up with a viable way of taxing these items.
In his Facebook account, Albay Rep. Joey Salceda said he has filed House Bill 6765, or the Digital Economy Taxation Bill, that seeks to properly capture the amount created by the digital economy in the country’s tax system.
The measure, he said, is estimated to generate as much as P29.1 billion in annual incremental revenues.
Meanwhile, Gregorio Honasan, secretary of the Department of Information and Communications Technology (DICT) supports the National Economic and Development Authority (NEDA) in advancing digital transformation, saying the agency continues to implement programs aimed at digitalizing the government, the community and the economy.
“We are employing a holistic approach towards digitalization, focusing on connectivity, cybersecurity and digital literacy. We are optimistic that the transition of the Philippines to a digital economy will make the country’s economy more resilient to external factors, such as the COVID-19 pandemic,” Honasan said.
