BIR: Digital VAT collection nears P7 billion

The Philippine government has collected almost P7 billion from a 12% value-added tax (VAT) on digital services, the Department of Finance said, providing a lift to revenue intake at a time when slower growth and a corruption probe are weighing on collections.

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The Bureau of Internal Revenue (BIR) has raised P6.57 billion since the digital VAT took effect in June, based on a document obtained by BusinessWorld.

Of the total, the BIR collected P2.78 billion from nonresident digital service providers as of Oct. 23.

Meanwhile, final withholding VAT from business-to-business transactions reached P3.79 billion as of Sept. 25—almost entirely from foreign platforms — with P3.77 billion remitted by private withholding agents and P5.85 million by government agencies,

Under the law, a 12% VAT is now imposed on nonresident digital platforms such as Netflix, Spotify, Amazon and Lazada.