Starting June 1, 2025, Steam will begin applying a 12% value-added tax (VAT) to purchases made by Filipino users. This change comes as part of the Philippine government’s implementation of Republic Act 12023, a new tax law aimed at taxing digital services provided by foreign companies. The VAT will affect all digital services, including online platforms like Steam, which sells games, downloadable content, and other digital products.
Republic Act 12023 and Its Impact
Republic Act 12023, signed into law by President Ferdinand "Bongbong" Marcos Jr., targets foreign businesses offering electronic services, cloud services, and platforms providing digital content. The law expands the scope of VAT to include companies like Netflix, Disney Plus, Google, and e-commerce platforms such as Lazada and Shopee, requiring them to collect taxes on services sold to Filipino consumers. This move ensures that foreign companies contributing to the local economy pay their fair share of taxes.
What Steam Users Can Expect
For Filipino gamers, the introduction of the 12% VAT means higher prices on games, DLC, and other digital content on Steam. While the increase may seem small, it could add up for frequent buyers. Steam, known for its expansive library of games and gaming hardware like the Steam Deck, will need to adjust its pricing structure to comply with the new regulation. This change is part of a broader trend where governments worldwide are increasing taxes on digital services to better regulate the booming online economy.
