Senators weigh in on VAT refund for foreign tourists

Foreign tourists on Boracay Island. STORY: Senators weigh in on VAT refund for foreign tourists

Local and foreign tourists enjoy the clear waters and powdery white sand of Boracay Island, one of the top beach getaways in the Philippines. (File photo by MARIANNE BERMUDEZ / Philippine Daily Inquirer)

MANILA, Philippines — Senators Nancy Binay and Sonny Angara welcomed on Monday the approval of the Value-Added Tax Refund Program for foreign tourists. But Sen. JV Ejercito advised weighing its benefits.

President Ferdinand Marcos Jr. has just approved the program, which would be implemented in 2024, to revitalize the country’s tourism industry.

The program would allow foreign tourists to get a VAT refund on their purchases here, which they could bring back home. The Bureau of Internal Revenue collects a 12-percent VAT on goods sold in the country.

“We welcome the President’s move to help kickstart the tourism industry by offering VAT refunds to foreign tourists,” Binay said in a statement. “It would be nice to see the Philippines as an alternative shopping destination and showcase our premium local brands.”

As a complement to the VAT program, Binay said in Filipino: “Let’s maybe add incentives to local enterprises and entrepreneurs who promote truly ‘Gawang-Pinoy’ [Filipino-made] items instead of those stores selling imported or foreign-manufactured products. I think the complement of the VAT refund program should be more towards this direction.”

In a separate statement, Angara said the program will make the country more competitive in attracting tourists.

According to him, other countries offer a similar VAT refund for tourists, which they get in cash or through their credit cards.

“It’s worth exploring since in the long run it may prove to be a win — since it may attract and encourage more tourist spending. It makes us more competitive,” Angara said.

Ejercito was more cautious in his statement, saying: “We need to weigh the benefits and consult the financial experts on its effects. The Philippines is not really known as a shopping destination but more for tourism and recreation. But then again if the benefits will offset the revenue lost on VAT  collections, then we can consider.”


President Marcos okays VAT refund for foreign tourists