Steam Purchases in the Philippines to Include 12% VAT Starting June

Filipino gamers will see an increase in the cost of video games and in-game purchases on Steam as a 12% value-added tax (VAT) will be applied starting June 1, 2025. This additional tax means a P1,000 video game purchase will cost consumers an extra P120, automatically added at checkout.

Scope of the VAT Increase

The VAT applies to all digital transactions, including:

• Video games
• In-game purchases
• Downloadable content (DLCs)

The implementation follows Republic Act 12023, or the VAT on Digital Services Law, signed into law by President Ferdinand “Bongbong” Marcos Jr. on October 2, 2024. This law amends the National Internal Revenue Code of 1997, encompassing digital services from local and international providers, impacting platforms like Netflix, Spotify, Amazon, Disney+, and Lazada.

Comparative VAT Rates

Compared regionally and globally, the Philippines’ 12% VAT on Steam purchases ranks among the highest in Southeast Asia, surpassing rates in UAE (5%), Taiwan (5%), Thailand (7%), Malaysia (8%), and Singapore (9%). Worldwide, Finland tops the list at 25.5%, with Sweden at 25%. Most countries maintain a VAT rate above 15%.

Impact on the Gaming Community

According to World Population Review, approximately 2.1 million Steam accounts were created by users in the Philippines as of March 2021. Given the significant local gaming community, gamers are encouraged to make timely purchases or await seasonal sales before the tax increase in June.

Sources and References

• Steam and international digital service VAT comparisons

• Republic Act 12023

• World Population Review data