With the vote count, the Philippine government agreed to pass a bill that would impose a value added tax (VAT) of 12% on digital transactions such as Facebook, Google, YouTube, Netflix, Spotify and others.
Thus it will be necessary for digital service providers based overseas to assess, collect and remit VAT on transactions through their platforms.
In July 2020, a lower house committee approved a bill that would impose a tax on companies providing services or digital goods via online platforms.
The bill targets a tax revenue of 29 billion pesos, of which the money is to help fund government measures to combat the COVID-19 virus.
The Philippines itself is a growing market for big tech companies, as its citizens make up one of the most social media users in the world.
There has been no good response from Alphabet, Facebook, Netflix, Spotify and Lazada or Alibaba on the decision.
The Philippines' decision follows similar moves by other Southeast Asian countries to generate revenue from popular digital services.
Last year, Indonesia imposed a 10% VAT on sales by technology companies. Earlier this month, Thailand also started to collect VAT from foreign technology companies.
