“Online services should not be taxed at 12%”
The representative of the former BAYAN Muna party list, Carlos Isagani Zarate, on Sunday criticized the plan to impose a 12% value added tax on Netflix, Spotify, Lazada and other online service providers, claiming that ultimately it would be “consumers who would bear this additional burden.
“We were told to stay home due to COVID but a lot (establishments) have been closed or even taxed, like ABS-CBN closing, right now there is a plan to tax Netflix , Spotify, Facebook, Google, Cloud, and other online providers,” he said.
“Furthermore, even the claim that it is the foreign company that is taxed is specious as it is always the consumers who will foot the bill in the end since VAT is a pass-through tax – that would mean higher subscription fees, service fees, and even online product prices. That’s why this tax is anti-consumer,” he added.
The proposed tax is another measure that hits the poor and middle class harder than the rich and big business, he said, adding that if the government really wanted to increase its coffers, it should commit to a system progressive tax system that taxes the rich directly. and big business over the poor, he said.
“For example, a 1% wealth tax may be levied on every million earned by an individual, family or corporation or a tax scheme for this purpose. It can also vigorously pursue Filipino offshore gambling operators and make them pay their billions in accrued taxes,” he said.
“It is tragically ironic that the government wants to tax the poor more, but it rushed through CREATE which would reduce the corporate and wealthy income tax rate and result in an estimated P259B loss of income for the government until 2022,” he added. The proposal is “definitely” anti-consumer and must be fought, thrown out and buried, he said.