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

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.

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.