THE House Committee on Ways and Means said it approved a measure on first reading that would impose value-added tax (VAT) on digital transactions.

On Wednesday, the panel approved a substitute bill consolidating House Bills (HB) 372, 3253, and 3341.

If passed, the bill would subject to 12% VAT on the sale of digital services such as online advertisements, subscription services, and others that can be delivered through the internet.

The measure would add a new section in the National Internal Revenue Code of 1997 that would require foreign digital service providers to collect and remit VAT for all transactions.

“This measure seeks to level the playing field between traditional and digital businesses by clarifying the imposition on VAT on (digital service providers),” Albay Rep. Jose Ma. Clemente S. Salceda, who chairs the House Ways and Means Committee, said in HB 372’s explanatory note.

A similar bill, HB 7425, was approved on third reading in the House during the 18th Congress but was not passed by the Senate. — Matthew Carl L. Montecillo