Philippines Steam VAT Increase: 12% Tax Starts June 2025

Philippine Steam users will see a 12% value-added tax (VAT) on all purchases beginning June 1, 2025. The change, announced on Steam’s website (Steamworks Documentation), is a result of a new Philippine law taxing digital services provided by foreign companies like Steam.

Announcement Regarding the VAT Increase

President Ferdinand “Bongbong” Marcos Jr. formalized the imposition of a 12% value-added tax (VAT) on digital services offered by foreign companies, signing Republic Act 12023 into law. The signing ceremony, a significant event in regulating the digital economy, took place in the Ceremonial Hall of the Malacañang Palace last year. This new legislation ensures that foreign companies providing digital services in the Philippines contribute their fair share to the nation’s revenue.

“We are not imposing new taxes; we are simply strengthening the authority and streamlining the process of the BIR to collect value-added tax on digital services,”

“This includes digital media, digital music, digital video, video-on-demand, and digital advertising. Local businesses and international digital platforms now compete on equal terms. We will no longer be playing by different sets of rules,”.

Marcos said during the signing ceremony in Malacañang Palace – October 2, 2024 , Wednesday

Filipino gamers should expect a modest increase in game prices due to the new VAT. A game costing ₱1,000, for example, will now include approximately ₱120 in VAT (12% of ₱1,000). Budgeting accordingly is recommended.

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Comparison to Other Southeast Asian Countries: The 12% VAT on Steam purchases in the Philippines will likely result in one of the highest digital tax rates in Southeast Asia, increasing the cost of games and digital content for Filipino gamers.

• Philippines – 12% VAT (starting June 2025)
• Indonesia – 11% VAT (implemented in 2025)
• Malaysia – 8% DST (Digital Services Tax) (implemented in 2024)
• Singapore – 7% GST (Goods and Services Tax) (implemented in 2022)
• Thailand – 7% VAT (implemented in 2022)

While the increase might be small for individual purchases, it could lead to reduced spending on games, a shift towards alternative platforms, or an increase in game piracy. The impact is expected to be relatively high compared to other Southeast Asian countries, but the law aims to create a more equitable environment for both local and international businesses in the Philippines.

Source: Steam, GMA News