VAT on e-commerce giants seen to hurt consumers

A HOUSE leader on Friday implored her colleagues in Congress to think twice about imposing a 12-percent value-added tax (VAT) on e-commerce giants Lazada and Shopee, saying such move would ultimately hurt consumers.

“We have to understand that the proposed VAT will be passed on to the consumers in the form of higher prices, which is totally unacceptable at this time of economic uncertainty,” House Deputy Majority Leader and Bagong Henerasyon (BH) party-list Rep. Bernadette Herrera said.

Herrera issued the statement after the House Committee on Ways and Means, chaired by Albay Rep. Joey Salceda, approved a bill imposing a 12-percent VAT on digital service providers, including e-commerce platforms and movie and music streaming services.

The party-list lawmaker, however, said she fully supports Salceda’s proposal to impose VAT on subscriptions to Netflix and other video and
music streaming sites, a market currently worth about P5 billion Herrera also warned that aside from consumers, small-time businesses
and sellers would also be directly affected by the imposition of 12-percent VAT on popular online shopping platforms.

She noted that both Lazada and Shopee are “a springboard for first-time and small-time entrepreneurs in the Philippines.”

“It’s not good to impose undue administrative burden associated with VAT on Lazada and Shopee, which have been of great help to small businesses and budding entrepreneurs,” she pointed out.

Herrera added that these online shopping platforms play a big role for consumers as the government promotes contactless transactions amid the coronavirus disease-19 (COVID-19) pandemic.

At the same time, Herrera said that Lazada and Shopee have been a source of alternative livelihood for Filipinos affected by the worst public health crisis of this generation.

“Many of our kababayans have lost their jobs due to the pandemic had to resort to selling products and services online just to make ends meet,” she stressed.