The committee approved Substitute Bill to HBs 6765 & 6944 – Imposing value-added tax (VAT) on digital transactions in the Philippine that includes Netflix and Lazada. The expected revenue by the Department of Finance is 10 Billion pesos, 9 billion for the non resident digital service provider and another 1 billion for the local resident digital service provider. This is too less far than the expected projection of 29 billion pesos. The following inclusion are sales or exchange of services rendered electronically, addition of transaction particular to digital advertising, subscription-based services, online services delivered through the internet are to be subjected to Value Added Tax (VAT).
Sale and importation of books, newspapers, magazines, or bulletin which sold electronically are exempted for this House Bill.
There is also a proposal that qualify non-resident digital service provider are not eligible to avail of the tax credit mechanism in relation to VAT.
Rep. Brosas raised the concern of possibilities that Mirco-Small and Medium Enterprises might be affected by this proposed Bill. The Chairman clarified that only 10,000 pesos worth of transaction and below are exempted to the imposition of VAT.
The Committee also tackle the Warehouse Import Clearance Process and the House Resolution filed by Rep. Pichay an inquiry into a possible abuses and institutional problems related to customs bonded warehouses. He recommended that Bureau of Customs to review the warehousing system by revisiting the provisions of the Customs Modernization Tariff Act on bonded warehouses and limiting the type, nature and number of bonded warehouses.
The Bureau of Customs presented a briefing about the operation of customs bonded warehouse. Rep. Suansing raised several issues pertaining to Petron and Chevron.