Telemedicine rates would also likely rise due to the collection of the 12-percent value-added tax (VAT) on digital services to be implemented by the government, according to the tax advisory firm KPMG.

KPMG noted in a report published on May 12 that the Bureau of Internal Revenue’s (BIR) revenue memorandum circular released on May 8 clarified that telemedicine services are among the digital services covered by the new tax measure.

“The circular clarifies the extent of the rules by stating that the regime also applies to teleconsultation platforms when appointments are booked through a website, applications, or e-marketplace,” KPMG said.

“Digital services” refer to services provided online or through electronic networks, mainly delivered through automated systems.

These services—such as online search engines, marketplaces, cloud services, digital media, advertising, platforms, and digital goods—will be subject to a 12-percent tax when consumed in the Philippines.

According to the report, digital services include “online consultations through a digital platform [such as] website, applications, and e-marketplace.”

It explained that such services fall within the category since “medical consultation cannot be booked, completed, and/or delivered without the use of information technology.”

As such, teleconsultations or virtual meetings via video or voice calls between doctors and patients are covered.

IT-mediated transactions allow doctors and patients to engage “in real-time discussions, providing and receiving essential medical assessments, diagnoses, treatments, and ongoing support.”

As per the tax advisory firm, other countries only classify services as digital (and apply digital service taxes) if they are mostly automated with little to no human interaction.

Locally, although Revenue Regulation No. 03-2025 defines “digital services” as those provided online using information technology and mainly automated, KPMG said it did not include the condition of “minimal human intervention.”

“It appears that the BIR does not consider the human intervention of doctors in this example to be ‘minimal’ but rather focuses on the features of the platform to determine whether it qualifies as ‘digital services,’” KPMG said.

“Businesses that have service offerings involving human intervention should therefore carefully review whether their services qualify as ‘digital services’” under the country’s rules for foreign digital service providers.