Philippine President Ferdinand Marcos Jr. has signed a new law imposing a 12% value-added tax (VAT) on non-resident digital service providers such as Netflix (NFLX, Financial), HBO, and Disney. This law, one of the first revenue-generating measures under Marcos' administration, encompasses online search engines, media, advertising platforms, digital marketplaces, goods, and cloud services.
During the signing ceremony, Marcos emphasized that entities benefiting from the country's productive digital economy should also contribute to its growth. He noted that the new law would level the tax playing field between local businesses and international digital platforms.
The Philippines, with one of the highest mobile usage rates globally, is leveraging tech giants to generate revenue for infrastructure and other government projects amid tight fiscal space. According to the Philippine Department of Finance, the VAT on foreign digital services is expected to yield PHP 79.5 billion (USD 1.4 billion) in revenue over the next four years.
