The lower house of congress in Philippines has approved a bill which imposes a 12% value added tax (VAT) to big technology companies operating in the country.
The lawmakers voted 167:6:1 in favor of the bill which affects multinational companies like Google, Facebook Inc. (FB), Apple Inc. (AAPL) and Netflix Inc. (NFLX). The 12% will be imposed on digital transactions by these companies in Philippines.
According to the bill, all foreign technology companies will be required to assess, collect, and remit VAT on all transactions passing through their various platforms.
It’s expected that the bill will raise $579 million which the governments intends to use to help with fighting the pandemic. Industry data has been showing that Philippines is a growing market for tech firms, moreover the Asian country is among world leading social media users.
Many of the big tech companies are yet to give their response on this development, however Google says that it always abides by the laws of the different jurisdictions and it will continue doing so.
“We comply with the tax laws in every country we operate in around the world including the Philippines, and will continue doing so as tax laws evolve,” said Google.