A network of digital advocates welcomed Makabayan Bloc’s House Bill No. 7844, which seeks to repeal the Value-Added Tax (VAT) on digital services, describing it as a timely and pro-consumer measure that will ease the financial burden on Filipino internet users, freelancers, students, MSMEs.
Digital Pinoys National Campaigner Ronald Gustilo said the proposed measure recognizes the economic reality that digital platforms are no longer luxury services but essential tools for work, education, entrepreneurship, and communication.
“Cloud services, online marketplaces, advertising platforms, and productivity software are now basic economic infrastructure. Taxing these inputs increases operating costs for freelancers and MSMEs, reduces their global competitiveness, and ultimately gets passed on to ordinary consumers,” Gustilo said.
The group emphasized that the VAT on digital services functions as a consumption tax on productivity tools, disproportionately affecting sectors that rely on digital platforms to generate income, including online sellers, content creators, business process freelancers, and students using subscription-based learning tools.
“Digital workers already face platform fees, payment gateway charges, and foreign exchange costs. The VAT layer further erodes take-home pay. At a time when the government is pushing for digitalization and the growth of the digital economy, policy should lower barriers—not add friction,” Gustilo added.
Digital Pinoys also noted that removing VAT on digital services will reduce operating costs for MSMEs and online entrepreneurs, improve the global competitiveness of Filipino freelancers, expand access to digital learning tools for students and encourage broader participation in the digital economy.
Gustilo stressed that government revenue generation should focus on efficient tax administration and plugging of leakages, rather than imposing additional burdens on end-users and small economic actors.
