00:00President Ferdinand R. Marcos Jr. signed the law that provides 12% VAT to foreign digital service providers or DSPs.
00:10Cucubra is expected to have a revenue of P100 billion for the government within 5 years.
00:17But the BIR assured that this will not have any effect on the consumers.
00:23This is what Clayzel Pardilla has to say.
00:27From his shoes, clothes, and make-up,
00:31Astred bought all of these from various international online shops.
00:36It's cheaper and more convenient.
00:39I have a lot of claims of vouchers, discounts, and free shipping.
00:44But Astred is now worried that the price of the product he is buying has increased.
00:49The Bureau of Internal Revenue will now issue a value-added tax,
00:53or 12% VAT, to foreign digital service providers or DSPs.
00:59In the lack of electronic marketplaces and online shops owned by businessmen,
01:05and foreign streaming platforms such as Netflix and HBO, Adam is going crazy.
01:12I'm very worried because my subscription fee is not just an app.
01:18I have three subscribers.
01:20If it's x3, my expenses will increase every month.
01:25According to an expert in BUIS,
01:28We expect that the subscription fees will immediately be increased by this new digital service tax.
01:37That means additional 12%.
01:40They are just depending on the consumers.
01:43And since they are not registered here, they are not paying income tax here,
01:47so they won't let the new law affect their operations.
01:51The BIR admitted that foreign digital service providers may be affected,
01:58but it should not be left to the consumers.
02:02It's a business decision by the service providers.
02:05But again, they should have been paying from the very beginning.
02:11So they should have incorporated the concept of VAT in the beginning during their pricing.
02:17So there can be a price increase.
02:21But again, I think it would be minimal.
02:23It won't automatically increase by 12%.
02:26Also, commensurate and same rate.
02:29Only foreign DSPs who earn more than P3 million will receive VAT.
02:35Not including those who are involved in education or training accredited by the Department of Education,
02:41Commission on Higher Education, and TESDA.
02:44The BIR believes that competition will be fairer between foreign and local online businesses
02:51that have been receiving the same BUIS for a long time.
02:55The BUIS will go to government projects and will go back to the Filipinos.
03:01It will help in turn in funding government projects, social welfare services, and infrastructure projects.
03:10So it will go back to us.
03:11This is effective 10 days after the Implementing Rules and Regulations were issued.
03:17The BIR will be aware if the website of foreign digital service providers will be blocked
03:24and will have to pay a value-added tax.
03:28Kalei Zalpardilla for Pambansang TV in Bagong, Philippines.
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