VAT impact on Netflix, other services felt by 2025

Consumers will likely feel the impact of the value-added tax (VAT) on foreign digital service providers in the first quarter of 2025, according to the Bureau of Internal Revenue (BIR) which stressed there is no guarantee from government that subscription costs will not increase.

- LOUISE MAUREEN SIMEON

The new VAT covers video streaming such as Netflix, Viu, Prime Video and HBO, as well as music streaming like Spotify and Apple Music, service vendors iTunes Store and Google Play, and video games like Activision and Nintendo.

"In other countries, they are paying their taxes. We are already late in the game. But of course, it is not guaranteed that there will be no price increase," BIR Commissioner Romeo Lumagui said at a briefing.

President Marcos has enacted into law the imposition of a 12-percent VAT on all digital services consumed in the Philippines. At present, only local digital service providers are subject to 12 percent VAT.

"We coordinated with the companies and they know their responsibility and they will comply. But we cannot say if they will increase their prices," Lumagui said.