The imposition of 12% Value-Added Tax on foreign digital services such as Netflix, HBO, Disney, Temu and Amazon poses dangers to workers and all Filipinos. We do not share the celebration being orchestrated by the government over President Ferdinand Marcos Jr’s signing into law of Republic Act 112023 on September 2.

We cast doubt on the government’s justification for the tax measure, that it will level the playing field between foreign and local digital service providers. The government should indeed level the playing field between the two groups of service providers, but it has to do more than impose taxes on the foreign ones. Without other policies that reflect genuine government concern for Filipino businesses and industries, we find such rhetoric hard to believe.

We fear that the foreign digital service providers will simply pass on the tax to workers and other Filipino clients through higher fees. Additional fees will be additional burdens for workers and Filipinos who are already suffering from low wages, lack of job security, and soaring prices of basic goods and services.

We cast doubt on legislators’ claims that 5% of the amount that will be collected from the taxes will be allotted to the development of local creative industries. Noynoy Aquino had his sin tax and Rodrigo Duterte had his Tax Reform for Acceleration and Inclusion (TRAIN) Law, yet many of the country’s industries are still calling out for government subsidies. Worse, many social services in the country remain underfunded.

We fear that the earnings from the tax measure – estimated to be P83.8 billion in 2024-2028 – will be pocketed by the country’s politicians through pork barrel, confidential funds, outright corruption, and other forms. Elections are coming up in 2025 and the country’s politicians are surely trying to find ways to increase their campaign kitties.

The behavior of Marcos Jr himself does not inspire trust. No less than the country’s Supreme Court has affirmed that the Marcos family owes the government P203 billion in estate taxes. The Marcos family, however, has refused to pay the tax, despite Marcos Jr’s role as the country’s chief executive.

The behavior of Vice President Sara Duterte in recent congressional hearings on the proposed 2025 national budget also does not inspire trust. The young Duterte refused to attend some hearings, attended other hearings but refused to answer questions, and personally attacked the legislators who were asking questions. She has been showing her disdain for transparency and accountability in the use of the people’s money.###