‘Why not tax oxygen’: Locsin on proposal to tax digital services

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Foreign Affairs Secretary Teodoro Locsin Jr. has posted a series of tweets opposing proposal to tax digital services. “Why not tax oxygen. My friend Joey Salceda, whom I so admired, has become a curse on our country,” Locsin said in a Twitter post.

“Useless. Stick to the money makers that can’t pass their added costs to the public. Money should stay in the pockets of those who earn it honestly. Tax digital services to BPOs and POGOs, tax a lot. Or maybe they are already taxed but DOF doesn’t know it,” the foreign affairs secretary said in a separate tweet.

“We’re about to tax everybody for using the internet a once smart but now idiot congressman has proposed,” Locsin said in another tweet.

“Secretary Dominguez said we have enough money. Enough is enough. I don’t know why Salceda feels the need for more,” Locsin also tweeted.

Locsin also said, “leave personal internet use alone for self-expression, knowledge and entertainment. The people need to vent their frustration and find distraction from stupidity.”

This is after House Ways and Means Chair Albay, 2nd District Representative Joey Sarte Salceda filed a tax bill that aims to “capture the value created by the digital economy better in the country’s tax system, plugging loopholes due to ambiguities in what kind of taxes digital services are liable to.”

“No new taxes here, we just want them to pay their fair share. Assuming you’re a company that sets up in the Philippines, and you do video-streaming or music-streaming services, you will definitely pay taxes. But companies like Netflix and Spofify don’t. That’s obviously not fair. When you’re a network in the Philippines, advertising services paid to you will be subject to VAT. But Google and Facebook are not subject to VAT for advertising. Ang laki po ng kinikita nila sa mga Pilipino, pero ni isang kusing ng VAT, wala.” Salceda explained.

“Internet marketplaces like Lazada and Shopee are growing very rapidly due to COVID-19, but there may be issues of tax compliance among its partners, too. And we are not able to capture that because our current definitions do not include them as withholding agents kahit nahawakan na nila ‘yung pera.” Salceda said. “Simply put, these are not new taxes. These are tax administration measures that we hope will capture the value more fairly, para pantay naman sa lahat ng negosyo sa Pilipinas. Especially when local businesses are struggling due to Covid-19, and there are these companies that are making a killing because of isolation, but are not paying enough taxes.”