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JV Ejercito asks DOF: Why punish digital consumers with taxes?

July 29, 2022

Senator Joseph Victor "JV" Ejercito on Tuesday said the Department on Finance (DOF) should focus on improving the collection of existing taxes instead of "punishing" digital users with new taxes.

This was in response to recent proposals by economic managers to levy new taxes on online services and digital streaming platforms such as Netflix and Spotify.

"The world is moving fast towards a digital economy, especially because of the pandemic, so why are we punishing digital consumers?" he said in a statement.

"We should provide incentives to businesses that will accelerate digitalization. Taxing consumers of the digital economy may not be a wise move in that regard," he added.

The lawmaker asked the DOF to present its tax collection and revenue generation strategies before levying new taxes on consumers.

"I would like to see the detailed proposal of the Department of Finance first. I would like to see a more comprehensive strategy towards fiscal responsibility and improved tax collection and revenue generation," Ejercito said.

"We can’t just raise taxes. We need to plug the holes first in terms of tax collection," he added.

Ejercito said the proposed tax is "counter-intuitive" and detrimental to the country's efforts towards achieving a more digital economy.

"Initially, I think the tax on single-use plastics makes sense because it will incentivize establishments and our people towards a more eco-friendly behavior, but taxing online purchases, including streaming apps, seems counter-intuitive if our goal is to strengthen e-commerce so we can align our economy towards digitalization," he said.

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