MANILA (Reuters) – The Philippines will impose a 12% value-added tax (VAT) on digital services offered by tech giants such as Amazon (NASDAQ:), Netflix (NASDAQ:), Disney and Alphabet (NASDAQ:). it’s a move that will level the playing field with domestic brick-and-mortar players, the revenue agency said on Thursday.

President Ferdinand Marcos Jr on Wednesday signed a law imposing VAT on non-resident digital service providers such as streaming services and internet search engines.

“This will promote fair competition among businesses that profit from consumers here in the Philippines. A level playing field ensures better products and services,” said Romeo Lumagui, Commissioner of the Bureau of Internal Revenue, in a statement.

The agency said that currently only domestic digital service providers are obliged to pay 12% VAT.

Netflix has no statement to make at this time, a company spokesperson for Asia-Pacific said in an email. Disney, Google and Amazon did not respond to requests for comment.

The government aims to collect 105 billion pesos ($1.9 billion) in VAT from 2025 to 2029. It plans to exploit 5% of that revenue to fund projects for the Philippines’ artistic industries, the president’s communications office said.

The office added that educational and public utility services will be exempt from VAT.

The Internal Revenue Service said digital services provided by foreign companies are deemed to be provided in the Philippines if they are used in the Southeast Asian country.

Tech giants have seen greater uptake in Southeast Asia since the pandemic, but they also face increasingly stringent tax regimes.

($1 = 56.15 Philippine pesos)