Digital Pinoys Backs ‘Makabayan’ Bill to Repeal 12% Digital VAT; Cites Burden on Freelancers and Students

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Digital advocacy group Digital Pinoys has expressed strong support for House Bill 7844, a measure seeking to repeal the 12% value-added tax (VAT) currently imposed on digital services.

The group welcomed the initiative as a necessary relief for Filipino internet users, freelancers, students, and MSMEs who have been shouldering additional costs since the implementation of the digital tax law.

What is HB 7844?

Filed on February 23, 2026, House Bill 7844 calls for the full repeal of Republic Act 12023 (VAT on Digital Services Act).

The bill was authored by the Makabayan Bloc, specifically:

• Rep. Sarah Jane Elago (Gabriela Women’s Party)
• Rep. Renee Louise Co (Kabataan Party-List)
• Rep. Antonio Tinio (ACT Teachers Party-List)

The bill argues that digital platforms are no longer luxury goods but essential utilities. By removing the 12% VAT, the legislators aim to ease the regressive tax burden on the working class. They suggest that the government should instead shift its revenue collection efforts toward wealthy individuals and large corporations rather than taxing essential digital tools.

As of this writing, the bill is pending with the Committee on Ways and Means.

Here is the copy of the full bill:

Digital Pinoys: “Digital Services Are No Longer Luxuries”

Echoing the bill’s explanatory note, Digital Pinoys emphasized that the current tax law disproportionately affects the sectors that drive the digital economy—freelancers, content creators, online sellers, and students.

Ronald Gustilo, National Campaigner for Digital Pinoys, pointed out that these users already face a stack of fees, from platform commissions to payment gateway charges. Adding VAT on top of this creates a barrier to entry for Filipinos trying to earn a living online.

“Digital workers already face platform fees, payment gateway charges, and foreign exchange costs. The VAT layer further erodes take-home pay. At a time when the government is pushing for digitalization and the growth of the digital economy, policy should lower barriers—not add friction.”

Ronald Gustilo, National Campaigner, Digital Pinoys

Economic Ripple Effect

The group argued that repealing the tax would yield better economic results than collecting it.

• For MSMEs: Lower operating costs would allow funds to be reinvested into product development.
• For Freelancers: Savings on software subscriptions and cloud tools could be used to upskill and improve global competitiveness.
• For Students: It would ensure affordable access to subscription-based learning tools, which have become a staple in modern education.

“Cloud services, online marketplaces, advertising platforms, and productivity software are now basic economic infrastructure. Taxing these inputs increases operating costs for freelancers and MSMEs, reduces their global competitiveness, and ultimately gets passed on to ordinary consumers.”

Ronald Gustilo, National Campaigner, Digital Pinoys

The 12% VAT on Digital Services

Signed into law by President Ferdinand Marcos Jr. on October 2, 2024, R.A. 12023 gave the Bureau of Internal Revenue (BIR) the authority to collect a 12% VAT on digital goods and services provided by foreign entities.

What is currently taxed?

• Streaming Services: Netflix, Disney+, Spotify, etc.
• Cloud Services: Google Drive, iCloud, AWS.
• Marketplaces: Amazon, Shein, Temu.
• Software: Adobe Creative Cloud, Microsoft 365, Zoom.

In early 2025, the BIR released Revenue Regulations No. 003-2025, which outlined the implementation mechanics, including the power to block non-compliant platforms.

In this article, BitPinas curated a list of services and platforms that are subject to the said 12% tax: 12% VAT! Here’s the Full List of Digital Services Now Taxed in the PH

This article is published on BitPinas: Digital Pinoys Backs ‘Makabayan’ Bill to Repeal 12% Digital VAT; Cites Burden on Freelancers and Students

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