When 12% Feels Heavier Than It Looks: Digital Service Law in the Philippines

I’ve been working online for years—building my career as a freelance writer, blogger, and content creator. My income doesn’t come from a fixed office job or a traditional paycheck. Instead, it comes from every article I write, every sponsored post I publish, and every little collaboration I land through hard work and consistency.




As someone who follows the law, I register my work and pay my taxes. I also cover my own health insurance, software subscriptions, website maintenance, and other tools needed to survive in the digital world. I don’t complain—I just get things done.




But now, the implementation of the Digital Services Tax Law in the Philippines adds 12% VAT on top of the services we already pay for—digital platforms, subscriptions, tools, even streaming. The same platforms that are essential for my work and livelihood.




This may sound small to some, but to us in the freelance and digital space, this is a burden. It chips away at our already slim margins. It makes every online transaction heavier. It makes survival even harder for self-employed Filipinos who are just trying to make an honest living online.


This tax feels like it came without warning, without real dialogue, and without any protection for the very people it affects the most.


Where are the benefits? Where is the support for Filipino freelancers, creators, and digital workers?




The digital workforce is no longer small. We are a growing economy within an economy. We are mothers, students, dreamers, hustlers—working behind screens, often alone, but always hoping for something better.


So before new laws are passed or taxes are imposed, I hope the government listens. I hope they see us. Understand us. Protect us.


Because we’re not avoiding responsibility—we’re asking for fairness.




The Digital Services Law in the Philippines refers to recent efforts by the government to impose value-added tax (VAT) on digital and online services, as part of its broader tax reform measures.

While there's no specific law officially named "Digital Services Law", this usually pertains to Republic Act No. 11967, also known as the Expanded VAT on Digital Services, which is part of the Tax Reform for Acceleration and Inclusion (TRAIN) Law and later proposals like the Digital Services Tax Bill.



Key Features:

  • 12% VAT will be imposed on digital services offered by non-resident digital service providers (DSPs), such as:

    • Streaming platforms (e.g., Netflix, Spotify)

    • Online marketplaces (e.g., Shopee, Lazada)

    • Subscription tools and software (e.g., Canva, Google Workspace, Zoom)

    • Online advertisements and freelance platforms (e.g., Fiverr, Upwork)

  • The Bureau of Internal Revenue (BIR) may require foreign digital providers to register and remit VAT if they earn over P3 million annually from Filipino consumers.

  • It affects Filipino freelancers and digital entrepreneurs because many of the tools and platforms they rely on become more expensive, and even local digital services could be taxed more heavily.

Concerns and Criticism:

  • No dedicated policies for Filipino freelancers or digital workers.

  • Higher operational costs for online professionals and small digital businesses.

  • Lack of support systems, benefits, or infrastructure in exchange for increased taxation.

  • Seen as a burden rather than a support mechanism for the fast-growing digital economy.

The Digital Services Law (or the VAT on digital services) in the Philippines affects a wide range of individuals and sectors, especially those who rely heavily on online tools, platforms, and services.




Here's a breakdown of who are affected:


1. Freelancers and Online Professionals Writers, VAs, designers, developers, and other gig workers who rely on platforms like Upwork, Fiverr, Canva, Google Workspace, etc.

Their tools become more expensive due to added VAT.

Service fees may go up, reducing net income.


2. Small Digital Entrepreneurs 

Those running online shops, digital marketing agencies, or content creation businesses using subscription-based tools and platforms.

Added costs may be passed on to customers or cut into their own profits.


3. Content Creators

YouTubers, TikTokers, vloggers, bloggers who use paid software for editing, design, analytics, etc.

May struggle with maintaining content quality due to budget constraints.


4. General Consumers

People who subscribe to Netflix, Spotify, YouTube Premium, etc., are now paying more because these services are subject to VAT.




5. Educational Institutions and Students

Many schools and students using tools like Zoom, Google Classroom, or Canva Pro are also hit by the additional cost, especially in blended learning.


6. Startups and Tech SMEs

Digital startups often rely on international services and tools during early stages.

Added costs affect innovation and scaling.


7. Overseas Digital Service Providers

International companies now need to register with the BIR and remit VAT if they earn over P3M from Philippine consumers annually.




The Digital Services Law affects anyone who uses or sells online services and tools, with a heavier impact on freelancers, digital workers, and small entrepreneurs—many of whom have little government support despite being taxed more.

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