Senator mulls VAT refund for foreign tourists to boost visitor arrivals
MANILA, Philippines — A senator is proposing a value-added tax refund mechanism for foreign tourists to "boost visitor arrivals in the Philippines," allowing tourists to avail a rebate of 12% VAT on goods — similar to the practice of other countries.
Sen. Jingggoy Ejercito Estrada filed Senate Bill 2148 just this month, a legislative measure which will add a new section to the National Internal Reveue Code of 1997.
"If we drive up the sales of our locally made products, MSMEs (micro, small and medium enterprises) will not be the only ones to benefit because the development of businesses will generate more livelihood for our countrymen," said Estrada in a statement in Filipino on Friday.
"Many studies have pointed out the multiplier effect of tourism. Direct spending may be a predominant contributor to GDP (gross domestic product), but indirect effects are also significant, suggesting a strong linkage with the local economy and in job generation."
Under SB 2148, tourists will be eligible for a VAT refund on goods costing at least P3,000 from authorized retailers in the country within 60 days from the date of purchase.
The secretary of the Department of Finance, upon the recommendation of the secretary of the Department of Tourism and the commissioner of Bureau of Internal Revenue is authorized to adjust the threshold based on administrative costs of processing refunds, inflation, and other market conditions.
It could be remembered that Sen. Sherwin Gatchalian filed a similar bill, SB 2023, this year which also aims on creating a VAT refund mechanism for non-resident tourists.
South Koreans remain the country's top tourists, comprising around 26.14% of the total 1.33 million foreign travelers according to the Department of Tourism's latest figures. — James Relativo
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