HOUSE deputy minority leader and Bayan Muna party-list Carlos Isagani Zarate on Thursday assailed the proposed measure seeking to tax all digital transactions and services, saying it will be an additional burden to digital consumers who have to stay at home because of the COVID-19 pandemic.
“They say we should stay at home to avoid COVID (coronavirus disease) but almost everything we do at home, they either close it down like ABS-CBN or tax it like what they plan to do to Netflix, Spotify, Facebook, Google, Cloud, and other online providers,” Zarate said in reaction to Albay Rep. Joey Salceda’s proposed bill.
Zarate warned the government that the proposal could drive the people to leave their houses amid the pandemic, causing more COVID cases.
“I won’t be surprised anymore if the number of COVID cases will rise because people will go out because of this (additional tax),” he said. “This proposal is definitely anti-consumer and must be opposed, junked and buried.”
Salceda’s bill seeks to amend the National Internal Revenue Code of 1997 to make digital transactions covered by VAT.
Zarate said the authors’ claim that foreign companies are the ones being taxed is “specious as it is still the consumers who will foot the bill in the end since VAT is a pass-on tax.”
“It would mean higher subscription fees, service charges, and, even prices of online products. That is why this tax is anti-consumer and can even be labeled COVID infection enabler,” he said.
The left-leaning lawmaker said the proposed tax will adversely affect the poor and middle class more than the rich and big corporations.
“If the government really wants to increase its coffers, it should embark on a progressive tax system that taxes the rich more rather than the poor,” he said. “A wealth tax of 1 percent, for example, can be levied on every million earned by an individual, family of corporation owns or something to that effect.”
Zarate said the government can also vigorously go after the Philippine Offshore Gaming Operators (POGOs) and have them pay their billions worth of accrued taxes.
The Department of Finance earlier said the measure can yield P10 billion in revenues, of which P9 billion will come from foreign businesses and P1 billion from local companies.
Salceda has said the measure “will not be felt by the most vulnerable households and will be felt only very mildly by the richest households, but it will certainly generate new revenues for our COVID response.”