Valve’s popular online game distribution platform, Steam, is set to begin applying a 12% value-added tax (VAT) on transactions in the Philippines starting June 1, 2025.
This follows Republic Act (RA) 12023, signed by President Ferdinand R. Marcos Jr. in October 2024, which enforces VAT on digital services provided through online platforms.
The definition of digital services under the law is broad. RA 12023 includes streaming platforms, e-commerce sites, and online advertising under its scope. This means services like Netflix, Disney+, HBO Go, Lazada, Shopee, Google, and Amazon are expected to implement VAT on their services. Non-compliant companies could face penalties, including temporary suspension of their operations in the country.
Under this law, 5% of the VAT revenue will support the local creative industry. However, the added tax will likely result in higher subscription prices for users, as businesses often pass on the cost to consumers.
For Filipino gamers, this change could impact how they use Steam. Known for its extensive game library and features like community interaction and the Steam Deck, Steam is a go-to platform for PC gamers. But with the new tax, users might need to think twice about their purchases.
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