Starting June 1, 2025, Steam officially implemented a 12% value-added tax (VAT) on all digital purchases made in the Philippines, including games, DLCs, and in-game content. This change aligns with the recent passage of Republic Act 12023, also known as the VAT on Digital Services Law. It marks a significant shift in how digital goods are taxed locally.
How the 12% VAT Affects Steam Game Prices
Steam’s pricing model now includes the 12% VAT directly in the listed price of games and other digital items. That means Filipino users won’t see an extra fee at checkout. For example, if a game is listed at ₱1,000, the ₱120 VAT is already factored in.
Game publishers are responsible for absorbing this cost or adjusting their pricing accordingly. While some publishers might increase prices slightly to offset the tax, others may keep pricing stable, particularly during major sale events. So far, most game prices on Steam remain relatively unchanged, though increases may gradually roll out depending on the publisher.
In short, the tax is already included in listed game prices. Publishers may adjust costs, but consumers won’t see direct changes due to new digital service taxes.
Why the Change Was Implemented
This VAT policy was enacted as part of a broader effort to modernize the Philippine tax code. Republic Act 12023 amends the 1997 National Internal Revenue Code to include digital services like video games, streaming media, online ads, and e-commerce platforms. The law impacts not just Steam, but also Netflix, Spotify, Amazon, Disney+, and Lazada.
The Department of Finance expects this to expand tax revenue while leveling the playing field for local businesses that already comply with VAT requirements.
How It Compares to Other Countries
While the 12% VAT may sting for budget-conscious gamers, it’s still modest compared to global rates. For context, Finland has the highest VAT on digital goods at 25.5%, while Sweden imposes 25%. In Southeast Asia, the Philippines’ new 12% rate is now among the highest, compared to 5% in the UAE and Taiwan, 7% in Thailand, 8% in Malaysia, and 9% in Singapore.
What Gamers Can Do
For Filipino gamers, the best strategy is to keep an eye on Steam sales and bundle offers. The Summer Sale, Autumn Sale, and Winter Sale still provide opportunities to snag games at reduced prices—even with VAT included. Creating a wishlist and setting up deal alerts through third-party tools like IsThereAnyDeal or SteamDB can help time purchases effectively.
Those with limited budgets may also consider exploring free-to-play titles or looking at regional pricing options on other platforms that still offer competitive rates.
You can check Steam’s FAQ for Taxes and the full list of countries here: https://partner.steamgames.com/doc/finance/taxfaq
