“We are tired.”
This was the comment of Filipinos following the implementation of the law imposing a value-added tax (VAT) on digital services in the country.
Discussions about Republic Act 1203, also known as the Digital Services Law, resurfaced on social media after a Facebook page recalled its implementation next month following its signing in October 2024.
Facebook page “Homebased Raketero,” run by Cloud Go Virtual owner Paul Harold Pacho, on Sunday, May 4 posted about the services and platforms that may be affected by the law.
“Imagine this: naka-chill ka lang, nood Netflix, shopping sa Shopee, gumagawa ng Canva designs, nag-run ka ng Meta ads, or naghahanap ng gigs sa Upwork… tapos boom, may dagdag na 12% VAT sa bill mo!” the page said.
“Freelancers, marketers, biz owners, binge-watchers — damay tayong lahat!” it added.
The post has earned 113,000 likes and reactions, 101,000 shares, and 12,500 comments so far.
It also made its way to a discussion forum where an online user urged Filipinos to “speak up” and “create noise” concerning the law.
“So, ayun na nga. Ibang klase din talaga, ‘lala ng gobyerno natin dito sa Pilipinas. Pati ba naman digital services, eh may tax na 12% na rin?” a Reddit user wrote on the “r/Philippines” subreddit on Tuesday, May 6.
“Tapos ang mga essential lang gaya ng education at banking services ang exempt? Eh, pano ‘yung livelihood ng freelancers at online workers? Hindi ba’t digital platforms ang kabuhayan ng marami ngayon?” the user added.
“Imbes na i-empower ang digital economy, parang tinatamaan pa lalo ang mga nag-ta-try kumita online. Parang sinasabing, ‘Gusto mong umasenso gamit ang internet? O sige, tax-an natin ‘yan!’ Nakakapagod na rin. Parang lahat na lang may dagdag gastos. Saan na napupunta ang buwis natin?” the Redditor said.
“Marami sa amin ay simpleng manggagawa lang na nagsusumikap araw-araw. Kung talagang layunin ng gobyerno ang inclusive growth, eh di dapat suportahan, hindi pahirapan,” the user continued.
Value-Added Tax on Digital Services
byu/Cytherean-Pepper15 inPhilippines
A digital worker questioned the law and claimed that the government does not even provide people like them with proper benefits like legal protection, health insurance, access to government loans, and job security.
“You don’t see the digital workers who stay up all night just to earn. The government we thought would give us equal opportunities has ignored us completely. Yet here you are, charging us like we’re giant corporations,” a Facebook user identifying as a freelancer said.
“You can’t even provide fast and reliable internet. No upgraded platforms for registration or support. No real help for remote workers. No policies that protect or uplift us from foreign clients,” the user added.
“We’re not anti-tax. We’ve always paid our dues. What we are against is poorly thought-out policies that bleed the digital workforce without offering support, protection, or long-term digital development plans,” she continued.
“We are tired. We are angry. We will not forget this,” the user added, saying that they will not give votes to lawmakers who thought of the law.
Meanwhile, reports of a streaming giant increasing its subscription fees appeared online in relation to the discussions.
Netflix Philippines will reportedly increase its plan prices starting June 1 as the Digital Services Law takes effect.
Its mobile plan, which was previously P149 per month, will now be P169.
Its premium plan, previously at P549 per month, will now cost P619.
Netflix’s basic plan, previously at P279 per month, will now be at P249. Its standard plan, previously at P399, will now cost P449 monthly.
The new law
The Digital Services Law strengthens the Bureau of Internal Revenue’s (BIR) authority to collect a 12% VAT on a wide range of digital services, including digital media, music, video games, video-on-demand, and digital advertising.
Other services included are online search engines, online marketplaces, cloud service, online media and advertising, and online platform or digital goods.
Those exempt are educational services and online courses and services of banks.
BIR Commissioner Romeo Lumagui Jr. previously said that the law will level the playing field in terms of tax collections among digital service providers, both local and foreign.
“This is not a new tax, just to clarify, but a crucial step in ensuring fairness on competition in our rapidly evolving digital economy,” he said in a Palace briefing before.
“For too long, local digital service providers have carried on and carried the tax burden of VAT while foreign DSPs or digital services providers, though profiting from our consumers, have not,” Lumagui added.
The new law is expected to generate an additional P105 billion of revenue in its first five years of implementation.
Two consumer rights groups criticized the measure as an “additional burden” on ordinary Filipinos, who they said would bear the VAT.
“If this will be in the form of VAT, this will be passed on to end users and that the companies will just end up as collectors of the tax,” Rights Action Philippines media relations officer Ferdie Ferido said to Inquirer before.
