Senators differ on plans to tax online purchases, streaming apps

TWO SENATORS  favor taxing single-use plastics but are not on the same page to impose the same on online purchases and streaming subscriptions.

Senator JV Ejercito said on Tuesday that he will study first the detailed proposal of the Department of Finance (DOF) to see a more comprehensive strategy toward fiscal responsibility and improved tax collection and revenue generation.

"We can’t just raise taxes. We need to plug the holes first in terms of tax collection," Ejercito said in a statement.

Ejercito thinks the tax on single-use plastics makes sense for it will incentivize people and establishments toward a more eco-friendly behavior.

However, he said taxing online purchases and streaming app subscriptions seems counter-intuitive if the goal is to strengthen electronic commerce to align the economy toward digitalization.

"The world is moving fast towards a digital economy, especially because of the pandemic, so why are we punishing digital consumers? We should encourage. We should provide incentives to businesses that will accelerate digitalization. Taxing consumers of the digital economy may not be a wise move in that regard," Ejercito pointed out.

Senator Francis Escudero believes that imposing new or increasing existing taxes in order to raise revenues is burdensome and is not keeping up with the current situation.

“I think the first order of business for the new Finance Secretary (Benjamin Diokno) is to plug loopholes, clean up and make collection of existing taxes and duties by the BIR (Bureau of Internal Revenue) and BOC (Bureau of Customs),” Escudero said in an interview.

On the other hand, Senator Sonny Angara favors taxing both single-use plastics and streaming app subscriptions, saying goods and services bought through the internet should really be taxable for value-added tax, as all goods and services are unless exempted by law.

"I am also in favor of taxing plastic as is the practice among other countries. This is intended to incentivize or encourage the use of recyclable bags and materials which is better for the environment," Angara said in a statement on Monday.

Diokno said the DOF is eyeing taxes on single-use plastics and online purchases, including subscriptions like Netflix that offers streaming service for movies and television shows, to generate more income for the government.

“In response to recent developments, on the basis of fairness, we intend to tax online purchases because if you buy a product from a regular store, you pay tax. And I think you should also pay a tax if it’s online,” Diokno said in a recent press briefing. (Wilnard Bacelonia)