Philippines Imposes 12% Value-Added Tax on Netflix, HBO; Oracle to Invest $6.5 Billion in Malaysia

Philippine President Ferdinand Marcos Jr. signed a law introducing a 12% value-added tax on digital platforms such as Netflix and HBO. Meanwhile, Oracle announced a $6.5 billion investment in Malaysia to build a cloud services hub, signaling a growing interest in Southeast Asia’s AI infrastructure.

PBBM Signed 12% VAT on Digital Services like Netflix and HBO, Aiming to Boost Infrastructure Revenue

On October 2, Philippine President Ferdinand Marcos Jr. signed a law imposing a 12% value-added tax on non-resident digital service providers such as Disney, HBO, and Netflix, per Bloomberg.

The new law, one of the first revenue-generating priority measures implemented under Marcos, encompasses online search engines, media, advertising, platforms, digital marketplaces, goods, and cloud services.

“If you are reaping the rewards of a fruitful digital economy here, it is only right that you contribute also to its growth,” Marcos said in a speech during the signing event. He added that the new law will level the taxes paid by local businesses and international digital platforms.

In response to its fiscal constraints, the Philippines is collaborating with technology giants to generate revenue for infrastructure and other government initiatives. The country has one of the world's highest rates of mobile phone utilization. The Finance Department anticipates that the VAT on foreign digital services will generate 79.5 billion pesos ($1.4 billion) in revenue over the next four years.

Oracle to Invest $6.5 Billion in Malaysia’s Cloud Services Hub, Joining Major US Tech Firms Expanding in Southeast Asia

In other news, Oracle Corp. is the most recent global technology company to invest in Southeast Asian AI infrastructure, with plans to construct a cloud services center in Malaysia for $6.5 billion.

The United States corporation will establish a cloud region in the country, a network of data centers offering services to corporate clients. It stated that this includes access to Nvidia Corp. processors that can be utilized to expedite the development of generative AI.

Oracle's commitment represents the most recent substantial investment by a major US technology company in Southeast Asia. Due to its abundant land, government support, and rapidly expanding markets, Southeast Asia is quickly emerging as a hub for cloud services.

On September 30, Alphabet Inc.'s Google announced its intention to allocate $1 billion toward constructing data centers in Thailand and similar initiatives in Malaysia. Amazon.com Inc. disclosed its $9 billion investment strategy in Singapore in May. Additionally, Microsoft Corp. has expressed interest in investing approximately $4 billion in the construction of data centers and other infrastructure in the region.

In endeavoring to broaden its global cloud infrastructure business to compete for a share of the AI market, Oracle could not provide any specifics or timeframes regarding its plans to construct in Malaysia. Bain & Co. anticipates adopting AI technology will disrupt companies and economies, resulting in a $990 billion global market for AI-related products by 2027.