Steam to impose 12% VAT for Philippine users in June
Gamers, you may want to keep your budget in check as the games available on Steam will be more expensive in the Philippines starting in June.
In an announcement on its Steamworks Documentation webpage, the game distribution company announced that effective June 1, it will implement a 12% value-added tax on every purchase on the platform.
Steam detailed that the VAT will be inclusive and will, therefore, be reflected in the prices of the PC games, so you won't need to calculate the additional tax when you check them out.
The Philippines has the highest tax increase among Asian countries. For instance, Taiwan has a 5% tax, the lowest among the neighboring countries, while Singapore, Malaysia, and Indonesia have VATs of 9%, 10%, and 11%, respectively.
The increase comes after President Ferdinand "Bongbong" Marcos Jr. signed Republic Act No. 12023, which imposes a 12% VAT on foreign digital service providers to generate revenues for the government.
During the bill's signing in Malacañang, Marcos highlighted how the new law would level the playing field for local and foreign providers.
"If you are reaping the rewards of a fruitful digital economy here, it is only right that you contribute also to its growth," he said, adding that whether it's a tech startup or a tech giant, they have a responsibility if they're making money in the country.
The law defines digital service as any service supplied over the Internet or other electronic network with the use of information technology.
These include online search engines, online marketplace or e-marketplace, cloud service, online media and advertising, online platforms, or digital goods.
Apart from Steam, other platforms affected by the measure include Netflix, Disney+, Amazon, Lazada, and Shopee, among others.
With the increase, it's recommended that you check out some of the PC games you've already added to your cart before Steam officially implements the change in June.
