Online services have been getting more expensive worldwide, and while the Philippines has largely avoided big price hikes, that’s about to change. The Marcos administration just signed a new law that will add Value Added Tax (VAT) on digital services. This means that paid services like Netflix, online search engines, streaming platforms, and cloud storage will soon become more costly for users in the Philippines, as most online services will now be subject to the new tax.
The new tax will hit streaming services like Netflix and Amazon Prime Video the hardest, as many Filipinos continue to subscribe to them. However, it’s unclear whether these companies will absorb the cost or pass it on to subscribers by raising prices.
Finance Secretary Ralph Recto emphasized that the goal of the tax isn’t to burden users, but to close the gap between local and international services. Before this law, the government taxed only local online services, which gave global platforms like Netflix an advantage. This new tax aims to level the playing field between them.
The only exceptions to this new tax are services that provide educational content, like online courses and webinars. Subscriptions purchased by educational institutions are also exempt, so platforms focused on learning won’t be affected by the VAT.
