Salceda: Netflix, Grab support digital tax bill

MAJOR online platforms like Netflix and Grab are backing a bill taxing digital services, while social networking site Facebook and Android mobile application Google Play are opposing it.

This is according to Albay Rep. José María Clemente “Joey” Salceda, who discussed the proposed legislation he authored — House Bill (HB) 6765, also known as the digital economy taxation measure — at an e-forum hosted by the Philippine Chamber of Commerce and Industry and the Management Association of the Philippines on Thursday.

During the forum, Salecda said the bill has two major features. One, it would make e-commerce platforms as withholding agents for income taxes to ease their partners of the burden of having to pay their own taxes while also encouraging tax compliance. And two, it would require those who render digital services to the local market to do so through a resident agent or representative office in the Philippines.

“I think it’s very reasonable,” the lawmaker said. “I already secured a statement of support from Netflix and, of course, Grab is also supporting the bill. Lazada, actually, has been paying P15 billion a year.”

These platforms are yet to say publicly they are backing the bill.

Despite their support, Salceda admitted that other platforms, like Facebook and Google Play, have expressed opposition to the measure.

“We can’t collect taxes from runaways like Facebook and Google Play’s,” he said, explaining that these companies do not want to be taxed because they are not headquartered in the Philippines.

Salceda called Facebook and Google [Play]’s reason for their refusal to be taxed as unacceptable, especially now that the government needs about P3.1 trillion for its coronavirus disease 2019 (Covid-19) response.

“It’s only fair that everybody should do their share in nation-building, in economic development and, of course, [in] solving the Covid problem,” he added.

Salceda has said tax administration measures under HB 6765 are estimated to yield as much as P29.1 billion annually in incremental revenues.

To date, the government’s Covid-19 response costs P1.74 trillion. Of the total, P352.7 billion have been released.

Salceda’s latest remarks come a day after the Department of Finance said it had begun a study that would determine how the government could capture tax leakages from digital services.

MAYVELIN U. CARABALLO