OCTOBERASIA BUSINESS OUTLOOK9NEWSROOMPHILIPPINES IMPOSES 12 PERCENT VAT ON DIGITAL SERVICES PROVIDED BY TECH GIANTSORACLE intends to establish its initial public cloud region in Malaysia with an investment exceeding US$6.5 billion, as announced by the company on Wednesday (Oct 2), marking a significant investment by a global tech company in the South-east Asian nation.Microsoft, Nvidia, Alphabet's Google, and ByteDance from China have pledged billions in digital investments in Malaysia for cloud services and data centers, fueling a surge in infrastructure due to the rising need for AI.A cloud region is where a company's public cloud facilities are physically situated. Oracle's upcoming venture is on track to become one of the biggest individual tech investments to date, surpassing the US$6.2 billion in planned expenditures by Amazon's cloud division AWS that was revealed last year.The upcoming public cloud region will assist Malaysian organizations in updating their applications, transferring their workload to the cloud, and experimenting with data, analytics, and AI, according to the American company.Oracle's executive vice-president for Japan and Asia-Pacific, Garrett Ilg, mentioned that it would enable the company's Malaysian clients, such as government agencies, financial institutions, and airline and hospitality firms, to utilize cloud services located within the country instead of abroad. The Philippines is set to implement a value-added tax (VAT) of 12 percent on digital services provided by tech giants like Amazon, Netflix, Disney, and Alphabet. This measure aims to level the playing field with domestic brick and store firms.The application of Value-added tax (VAT) on non-resident digital service providers, including streaming services and online search engines, was authorized by President Ferdinand Marcos Jr.Bureau of Internal Revenue Commissioner Romeo Lumagui said "This will promote fair competition amongst businesses that are profiting from consumers here in the Philippines. A level playing field produces better products and services," Currently, only domestic digital service providers must pay the 12 percent VAT.The government wants to utilize the VAT to raise 105 billion pesos, or $1.9 billion, between 2025 and 2029. It intends to use five percent of this income to support initiatives in the Philippine creative industries.The presidential communications office saidThe office also stated that services in the public interest and education would not be subject to VAT. Tech companies have been using their products more in Southeast Asia since the pandemic, but they are also subject to more onerous fiscal tax laws. ORACLE TO FUND USD 6.5 BILLION TO ESTABLISH CLOUD FACILITIES IN MALAYSIA
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