Philippines moves closer to taxing technology giants

Manila, Philippines. Photo: David Milmont/unsplash

A proposed bill that will allow the Philippines to tax tech giants like Facebook, Alphabet’s Google and Youtube, and Netflix, moved a step closer to becoming a law after a lower house committee approved it on Wednesday.

The bill, which aims to raise 29 billion pesos ($590 million) to help fund government measures to fight the coronavirus, follows similar plans by other Southeast Asian countries to generate revenues from the most popular digital services.

“If brick-and-mortar establishments, which are the hardest-hit by the pandemic, have to pay VAT, the giants of e-commerce should not be exempt,” Congressman Joey Salceda, the bill’s principal author, said in a statement.

The bill proposes value-added tax of 12% on digital services. It still needs to clear the lower chamber and a similar bill has been submitted to the Senate.

Starting next year, Salceda said, funds raised from new taxes would also be used to finance digital programmes such as a national broadband project and digital learning, to fill the education gap caused by school closures due to the virus.

The Philippines is a growth area for big tech firms, with Filipinos among the heaviest social media users in the world.

Facebook, Google, Youtube, Netflix, Spotify and Alibaba’s Lazada did not immediately respond to requests for comment.

Tech giants are increasingly facing tougher fiscal regimes in Southeast Asia, whose regulators held talks last year on a region-wide effort to tax tech giants more.

In May, Indonesia announced plans for VAT of 10% on digital products to boost revenues amid the pandemic.

Thailand in June approved a draft bill requiring foreign digital service providers to pay VAT of 7%.

Reuters

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.