Tourism advocates in Cebu express support for VAT exemption of tourists

TOURISM advocates in Cebu said yesterday they will support the move by retailers to ask Congress to exempt foreign tourists from paying value-added tax (VAT).

Entrepreneur Jonathan Jay Aldequer said the move will show that the country is serious about its tourism.

“This is a wonderful move to signal and convey the message to visitors that we appreciate their business. Just like liberating visa requirements, these tax incentives will be an added lure to make the Philippines, indeed, more than,” said Aldeguer, president and chief executive officer of The Islands Group.

The Philippine Retailers Association (PRA) earlier announced plans to seek VAT exemption for foreign tourists to encourage them to shop more in their stay in the country.

PRA chairman emeritus Samie Lim was quoted in news reports as saying other countries already exempt foreign tourists from having to pay VAT.

“It is not right to tax tourists because they only stay here for a while, so they don’t really make use of the basic services that government gives locals from revenues generated,” Lim said.

Hans Hauri, vice president of the Tourism Congress of the Philippines for the Visayas, said he would support the move because it will encourage foreign tourists to spend more.

But he said regulations need to be put in place in terms of quality of goods, minimum purchase, refund mechanism and even location of refund counters.

“We might start with Duty Free shops first on a trial basis. Let’s do some math to evaluate the potential expenses of the scheme,” Hauri said.

Cebu Chamber of Commerce and Industry (CCCI) tourism chairperson Milagros Espina echoed the sentiment saying the initiative should be carefully studied.

But she believes foreign tourists will still shop with or without VAT exemption, given that Philippine products are relatively cheaper and varied.

“Perhaps we should look for other incentives for both local and foreign buyers. That is how other countries attract shoppers,” she said.

Cebu Business Club president Gordon Allan Joseph said the move should be considered urgent because this is already done in almost every major tourism-oriented country, including Singapore and Thailand.

“We should do it and do it well as it will strengthen our tourism product,” Joseph said.