MANILA, Philippines – President Ferdinand R. Marcos Jr. on Monday, December 9, signed the law on the refund of Value Added Tax (VAT) for non-resident tourists.
The law aims to attract more non-resident tourists to the country by providing them a VAT Refund System on locally purchased goods.
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| Photo courtesy: Presidential Communications Office (PCO) |
In his speech during a ceremony in Malacañang, President Marcos said aside from encouraging higher spending among tourists to stimulate economic growth, the law is also an opportunity 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. Within this significant share, shopping emerged as the second largest expenditure for inbound tourists,” President Marcos said.
“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 this program, tourists can claim a refund on purchases made on accredited stores worth P3,000, provided these goods are taken out of the country within 60 days of purchase.
According to the President, an estimated 30 percent increase in tourist spending is the projected economic impact of this measure which will benefit both large-scale industries and micro, small, and medium enterprises (MSMEs), citing 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.
To successfully implement the newly signed law, President Marcos ordered the Department of Finance (DOF) and the Bureau of Internal Revenue (BIR) to craft rules and regulations that would streamline the VAT refund process.
“As we move forward, I urge the Department of Finance 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,” the President said.
Per the DOF, the estimated VAT refunds to tourists may reach PhP2.9 billion to PhP4.1 billion annually. However, the projected loss can be offset by the potential increase in tourist spending and a boost in inbound tourism.
— The Summit Express
