Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno is seeking to exempt all digital transactions less than P500 from the 12 percent value-added tax.
In a Laging Handa briefing on Friday, Diokno said excluding small value transactions from VAT would encourage more people to use digital modes for their financial dealings.
“In general, I think VAT is a good tax, pero iyong mga small transactions, let say, less than P500 ay i-exempt natin sa VAT,” he said.
Last month, the House of Representatives approved on final reading House Bill 7425 which slapped a 12 percent VAT on digital transactions to help boost government revenues.
The BSP has been promoting the use of digital transactions, which has boomed during the pandemic with its goal of increasing the share of digital transactions to 50 percent of total purchases by 2023 from about 20 percent in 2020.
This goal is backed by several programs such as the increase of payment operators that offer electronic financial services and the lowering of transaction fees.
BSP has instituted two electronic payments facilities namely PESONet and InstaPay under its National Retail Payments System (NRPS).
Monetary authorities said the volume of PESONet transactions totaled around 31.6 million in the first half of 2021, up by 164 percent year-on-year. InstaPay transactions during the same period jumped by 223 percent to 201 million.
To date, there are 87 financial institutions that are providing PESONet service while 55 financial institutions have InstaPay service.