Zarate explains why proposed VAT on Netflix, Spotify is a bad idea

An anti-consumer proposal that must be junked.


That's how former Bayan Muna Party-list Rep. Carlos Zarate described the proposals from some sectors to impose a 12 percent value added tax (VAT) on Netflix, Spotify, Lazada and other providers of online services and streamed entertainment content.

"This proposal is definitely anti-consumer and must be opposed, junked and buried," Zarate said in a statement over the weekend.

"This proposed tax is another measure that hits the poor and middle class more than the rich and big corporations. If the government really wants to increase its coffers, it should embark on a progressive tax system that taxes directly the rich and big corporations more rather than the poor," he said.

"For instance, a wealth tax of 1 percent can be levied on every million earned by an individual, family or corporation or a tax scheme to that effect. It can also vigorously go after the Philippine Offshore Gaming Operators (POGOs) and have them pay their billions worth of accrued taxes," noted the former senior deputy minority leader.

Zarate said the proposal is anti-consumer since it could result to higher subscription fees, service charges, and even prices of online products.

"It is tragically ironic that the government wants to tax the poor more but it rushed the passage of the CREATE (Corporate Recovery and Tax Incentives for Enterprises) that would lower the income tax rate of corporations and the rich and will result to an estimated P259-billion revenue loss for the government until 2022," Zarate said.

Bayan Muna belongs to the Makabayan bloc, members of which traditionally align themselves with the House minority.