back to article Philippines floats digital services tax – and Uber’s local arm surprisingly applauds

The Philippines will consider a digital services tax after the head of the nation’s Ways and Means Committee, Joey Salceda, proposed one as a measure to increase the nation’s post-pandemic tax base. The Committee is The Philippines body concerned with all fiscal matters and Salceda is a member of the ruling PDP–Laban party, …

  1. TrumpSlurp the Troll
    Trollface

    Tax on whom?

    VAT is paid by the customer not the supplier.

    Much the same as import duties.

    This is just an additional tax on the locals, with global suppliers used as tax collectors. It isn't a tax on revenue or profits of the supplier. They still make out like bandits.

    So it isn't costing the globalist money directly, just pushing up local prices (import duty) to try and encourage local suppliers to compete.

    However it seems to be pitched as "we will tax the tax avoiders" not "we will tax you for using these suppliers".

    1. lglethal Silver badge
      Go

      Re: Tax on whom?

      My thoughts on your statement are - Yes and No. Yes VAT is a tax on the person buying. But by not paying it on goods bought online, the onlines stores can naturally have lower prices then local stores. That means a sale is made and ZERO tax goes to the government. When the online store has to collect VAT as well, it should mean that prices are relatively even between them. If people then buy more locally, that means your not only getting VAT, but the company tax on the local firm, plus employee taxes, etc.

      Making it an even playing field, does really have a big effect overall.

    2. David 132 Silver badge
      Facepalm

      Re: Tax on whom?

      When this "$ENTITY_I_HATE doesn't pay enough tax" argument is advanced by someone who voluntarily pays more tax each month/year to their government than they're required to (as in, "I owe £X tax, but please Mr Government, take £2X from me!") and doesn't avail themselves of, for example, the personal tax-free allowance, deductions, ISAs etc, then I might listen to it. Until then, it's just the bitter, resentful whining of the green-eyed monster.

    3. Anonymous Coward
      Anonymous Coward

      Re: Tax on whom?

      "VAT is paid by the customer not the supplier"

      Not if there is a "market price"

      Consider a $100 market price service with a $70 (excluding VAT) cost. Assume both companies have same costs etc.

      Local supplier makes $30 - 15%VAT= $15, -20% income tax = $12 for local

      US supplier pays no VAT or tax on profits (if it reinvests offshore) = $30 for US

      Say both invest all profits in growth for 5 years. G=alog(log(30/12)*5) and assume growth is directly proportional to investment.

      After 5 years, the US company is 97 times bigger. This is why what seems like a small VAT difference is a huge issue to economies, and why tax criminals like G&F can grow so big, without needing be be any better at what they do than local competitors.

    4. katrinab Silver badge
      Boffin

      Re: Tax on whom?

      That's not really true.

      Firstly, it is the supplier who sends the money to the tax authorities.

      Secondly, whether it is a turnover tax or a sales tax, the effect on the price the customer pays is exactly the same, and depends on supply and demand. The supplier would very rarely be able to pass on all the additional cost to the customer, because some customers will stop buying when the price increases.

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