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An edited photo featuring Steam games with the digital distribution platform's logo.
Steam / Philstar.com's screenshot
MANILA, Philippines — Buying video games on Steam may become more costly for Filipino gamers as a 12% value-added tax (VAT) takes effect starting June 1.
This means consumers will pay an additional P120 for a P1,000 video game, with the tax automatically reflected in the final price before purchase.
In-game purchases and downloadable content (DLCs) will also be subject to the 12% VAT as they are counted as digital purchases.
Steam, the digital distribution platform for PC games, announced the tax collection for the Philippines on its website.
The move follows the passage of Republic Act 12023 or the VAT on Digital Services Law, which taxes digital transactions for both local and foreign digital service providers.
The law amends the National Internal Revenue Code of 1997 — or the Tax Code — to cover digital services such as media, music, video games, video-on-demand and online advertisements.
Platforms like Netflix, Spotify, Amazon, Disney+ and Lazada are among those affected.
President Ferdinand “Bongbong” Marcos Jr. signed the measure into law on Oct. 2, 2024.
RELATED: Marcos signs law imposing 12% VAT on foreign digital services
Compared to other countries, the Philippines still has one of the lowest tax rates on Steam games. However, its 12% VAT is higher than the 5% imposed in the United Arab Emirates and Taiwan, 7% in Thailand, 8% in Malaysia and 9% in Singapore. It is one of the highest in Southeast Asia.
Globally, Finland has the highest tax rate at 25.5%, followed by Sweden at 25%. Most countries, however, impose a rate above 15%.
According to World Population Review, around 2.1 million accounts were created in the Philippines before March 24, 2021.
Gaming enthusiasts may want to purchase their wishlist games or wait for sales before the 12% VAT takes effect in June.
