AN OFFICIAL of the Mactan-Cebu International Airport Authority (MCIAA) has expressed support for the implementation of the Value-Added Tax (VAT) Refund Program for foreign tourists in 2024.

MCIAA General Manager Julius “Jayjay” Neri Jr. told SunStar Cebu Monday, Jan. 30, 2023 that the program is very good because it will help establish the Philippines as a shopping destination for foreigners.

A business group leader said the VAT refund program will benefit local businesses.

However, a party-list representative urged the administration of President Ferdinand “Bongbong” Marcos Jr. to prioritize the repeal of the VAT on basic goods and services and excise taxes on fuel instead of providing VAT refunds to tourists.

The MCIAA’s Neri noted that other tourism destinations such as Singapore and Dubai have the VAT refund, which will encourage people to shop or boost consumers’ spending as well as tourism.

“I’m very, very much in favor of that although it will again be more of work in the airport because ari man sa (it will be here in the) airport mag-koan sa (where processing will be done for the) refund,” he said.

The Philippine government collects a 12 percent VAT on goods consumed within the country. Under the VAT refund program, foreigners would be able to get a VAT refund on items they are taking out of the Philippines.

E-visa their idea

Neri also expressed his agreement with other recommendations of the Private Sector Advisory Council (PSAC) that were approved by Marcos Jr. including the rollout of the electronic visa (e-visa) by 2023, prioritizing the countries of China and India; the removal of One Health Pass (OHP) or requirement of one form only for health, immigration and customs; revocation of outdated advisories and loudspeaker announcements in the country’s airports; and the automatic inclusion of travel tax in all airline tickets.

Neri said he really encouraged the use of the e-visa in the Philippines, adding that the rollout in India was one of the recommendations coming from them as a group who visited the country in the middle of last year.

Neri said they went to India to try to encourage Indian tourists to come to the Philippines considering that China, which used to be a good market, was still closed at the time due to the Covid-19 pandemic.

He said India has a very big potential since it is the second most populous country in the world.

He noted the number one problem cascaded to them was the visas for people from India coming to the country, considering that they still have to appear before the Embassy.

Neri said the Embassy in Delhi, for example, could accommodate only about 200 applicants a day.

“It’s not feasible because one airplane alone has a capacity of more than 300, and you have multiple flights a day. You have to be able to accommodate a lot, and that’s only for Cebu that we are marketing. How about ang Manila?” Neri said.

“We really have to upgrade our visa requirement process for India, and the same is true for China. China has visa upon arrival. But here, we don’t have visa upon arrival for Chinese,” he added.

Neri further stressed that travelers around the world want a seamless experience such as the ability to book a hotel or ticket online.

Red tape

Neri also supports the removal of One Health Pass (OHP) or the requirement of one form only for health, stressing that the less red tape, the better, as they want a seamless experience for travelers.

The general manager also disclosed that they already revoked outdated advisories and loudspeaker announcements at the MCIA a few days ago, noting there was no reason to have such.

“We don’t want to even mention Covid-19 anymore. We are through with that although people can still get Covid,” he said, adding that most cases nowadays are experiencing only mild symptoms.

As for the automatic inclusion of travel tax in all airline tickets, Neri said it should be all in one as travelers paid for their tickets anyway.

“It’s less red tape for everybody. I’m really for anything that has to do with passenger convenience,” he said.

The Malacañang earlier said Marcos will issue an executive order to implement the tax refund program, which is also being carried out in other countries.

Boon for business

Cebu Chamber of Commerce and Industry president Charles Kenneth Co also expressed support for the VAT refund program, telling SunStar Cebu Monday it will ignite tourism and economic activity in the country.

“It will encourage tourists to buy more local goods, and this will benefit local businesses,” Co said. “Our local manufacturers should take advantage of this, especially the ones making native goods and delicacies aimed at tourists.”


Not everyone, however, has applauded the VAT refund plan.

“While millions of Filipinos are suffering from high prices of basic goods and services, the Marcos administration prioritizes giving VAT refunds to foreign tourists. Prices of basic goods, especially food items soared due to the increasing prices of fuel products, (yet) our government continues to refuse to do anything about these soaring prices of basic goods which could start with repealing excise taxes and VAT on oil products,” House Deputy Minority Leader and ACT Teachers Rep. France Castro said in a statement.

“We in the Makabayan bloc filed several bills removing VAT on fuel and oil products, electricity system loss charges, tolls, water, all essential drugs and medicine, nutritional foods and drinks. We also filed House Bill 568 Reversing Regressive and Anti-Poor taxation, repealing certain sections of RA 10963 or the Train Act. These should be the priority of the Marcos Jr. administration that would give great relief to millions of Filipinos,” Castro said. (MKG with EHP, JKV, PR)