By Philippine Star
To boost revenue collection
Expanding value-added tax (VAT) regimes to include imported digital services on digital transactions could help boost the Philippines’ revenue collections, according to the International Monetary Fund (IMF).
In a report titled “Digitalization and Taxation in Asia,” the IMF said that charging VAT on remotely delivered digital services and some goods to customers could directly increase the overall VAT revenue of the Philippines, Bangladesh, India, Indonesia and Vietnam by up to 0.11 percent of gross domestic product (GDP).
The IMF’s Asia-Pacific and Fiscal Affairs Departments stated in the 74-page report that the projection was based on 100 percent of digital media content transactions, 10 percent of all e-commerce transactions, five percent of digital advertising and 15 percent of e-services, mobility and travel services.
“This initial revenue gain can become larger through indirect effects,” it said.
The IMF said governments could realize potential additional benefits by including digital services and electronic commerce in the VAT net by using the large amount of information held by digital platforms to enhance compliance with VAT, other taxes, and other taxpayers using the platforms as tax collection agents.
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