VAT on Digital Services: Funding Programs or Fueling Corruption?
The recently signed law imposing a 12% VAT on foreign digital services like Netflix, Spotify, and other platforms brings up a critical debate. The government aims to collect substantial revenue, which can be used for essential programs like education, infrastructure, and healthcare. In theory, this is a positive step, as it targets luxury services that don’t impact basic needs. But the bigger question remains:
Countries like Canada demonstrate the effective use of tax revenues, providing excellent public services like universal healthcare. Their taxes directly benefit citizens, reflecting strong governance and transparency. Unfortunately, in the Philippines, many taxpayers worry that increased revenues won’t necessarily translate into improved services. Corruption has long been a problem in the country, often diverting funds away from where they are most needed.
Where will these funds go, and what will they accomplish? Will we see new schools built, roads improved, or healthcare made more accessible? Or will this money disappear into inefficient projects and the pockets of corrupt officials? If corruption remains unchecked, this new tax could become just another burden on consumers, with no real benefits for the public.
The Government Must Prove That It Uses Revenues Wisely
When the government collects funds, what processes ensure transparency and accountability? The success of this new law hinges on trust. If taxpayers doubt that officials will use their money properly, they will quickly withdraw support for any new tax, even those with good intentions.
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Ultimately, the success of this VAT will depend on whether the collected funds lead to real, visible improvements in people’s lives, not just on paper but in action.
