(Bloomberg) — Philippine President Ferdinand Marcos Jr. on Wednesday signed a law imposing a 12% value-added tax on non-resident digital service providers including Netflix, HBO and Disney.
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The new law, among the first revenue-generating priority measures passed under Marcos, covers online search engines, media, advertising, platforms as well as digital marketplaces and goods and cloud services.
“If you are reaping the rewards of a fruitful digital economy here, it is only right that you contribute also to its growth,” Marcos said in a speech during the signing event. The new law will level the taxes paid by local businesses and international digital platforms, he added.
The Philippines, which has among the world’s heaviest mobile phone usage, is tapping tech giants to raise revenue for infrastructure and other government projects amid tight fiscal space. The VAT on foreign digital services is expected to generate 79.5 billion pesos ($1.4 billion) in revenue in the next four years, according to the Finance Department.
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