From Pixels to Taxes: A Comparative Study of Digital Economy Tax Policies in the Philippines to Selected ASEAN Member States

Abstract

This research focuses into the proposed Digital Economy Taxation Act, scrutinizing its provisions aimed at bolstering income tax and value-added tax (VAT) compliance. The bill mandates network intermediaries and ecommerce platforms, including those without a physical presence in the country, to act as withholding agents, a move that has sparked debate over its implementation challenges, such as the requirement for non-resident entities to establish a representative office within the Philippines. Utilizing qualitative method through documentary analysis, this study compares the Philippine approach to digital taxation with initiatives undertaken by other ASEAN countries, analyzing literature, articles, reports, blogs, and media releases to gain insights to the regional tax landscape. The paper seeks to uncover the nuances of each country's digital tax policies, focusing on the variance in tax rates and the thresholds set for business registration. The analysis extends to the potential economic impacts of the Digital Economy Taxation Act on the Philippines, considering both the opportunities and complexities posed by its enforcement. The paper underscores the imperative nature of digital taxation in an era increasingly reliant on digital transactions while highlighting the challenges associated with tax collection from non-resident digital service providers. The research provides a comprehensive understanding of the ASEAN digital taxation framework and offer insights into establishing unambiguous rules that ensure effective tax collection without hindering the growth of the burgeoning digital economy.