PRESIDENT Ferdinand “Bongbong” Marcos Jr. signed into law on Monday, December 9, 2024, a measure for the imposition of value-added tax (VAT) refund for non-resident tourists.
Marcos enacted the measure in a bid to attract more non-resident tourists to visit the country, to stimulate economic growth, as well as to promote the Philippines’ unique craftsmanship of indigenous products in communities near local tourist destinations.
“It is no secret that shopping has become an essential part of the travel experience, and we are poised to capitalize on that momentum. In 2023, the Philippine tourism sector played an instrumental role in our nation’s economic recovery, contributing an impressive 8.6 percent to the GDP (gross domestic product). Within this significant share, shopping emerged as the second largest expenditure for inbound tourists,” Marcos said in his speech.
“With this in mind, we are introducing the VAT refund program for non-resident tourists—designed not only to stimulate more spending but to promote the Philippines as a premier global shopping destination,” he added.
Under the law, the VAT Refund System will apply on locally purchased goods.
Tourists can claim a refund on purchases made in accredited stores worth P3,000, provided that goods are taken out of the country within 60 days of purchase.
Through the law, tourist spendings is seen to increase by 30 percent, which will benefit both large-scale industries and micro, small, and medium enterprises (MSMEs).
Marcos cited Marikina shoes as an example.
“These products tell our story, and now, with the VAT refund, they will be able to be more accessible to global consumers, elevating once again our stature in the global market,” the President said.
“As we move forward, I urge the Department of Finance (DOF) and the Bureau of Internal Revenue to craft [the] implementing rules and regulations that would make this VAT refund process simple, accessible, and culturally inclusive,” he added.
The DOF and the Bureau of Internal Revenue (BIR) will craft rules and regulations that would streamline the VAT refund process.
According to the DOF, the estimated VAT refunds to tourists may reach P2.9 billion to P4.1 billion annually.
However, the projected loss can be offset by the potential increase in tourist spending and a boost in inbound tourism. (TPM/SunStar Philippines)