By Brian Campued
To encourage higher tourist spending and promote the Philippines as a “premiere global shopping destination,” President Ferdinand R. Marcos Jr. on Monday signed a new measure providing refund of value added tax (VAT) for foreign tourists on locally purchased goods.
Republic Act (RA) No. 12079, or the VAT Refund for Non-Resident Tourists Act, will allow foreign tourists to claim refunds on purchases exceeding P3,000 made at accredited stores, provided the items are taken out of the country within 60 days.
“This initiative opens a new chapter in our tourism landscape,” the President said in a speech at Malacañang, adding that the measure allows the country to compete with other tourism markets in enticing tourists to patronize authentic, high-quality indigenous products.
He also noted that the tourism sector contributed 8.6% to the Philippine gross domestic product—with shopping emerging as the second largest expenditure for inbound tourists.
“It is no secret that shopping has become an essential part of the travel experience, and we are poised to capitalize on that momentum,” Marcos said.
“This initiative opens a new chapter in our tourism landscape, allowing the country to compete with other tourism markets that attract tourists who are eager to take home authentic, high-quality Filipino products,” he added.
According to the Chief Executive, the VAT refund scheme is projected to increase tourism spending by 29.8%, benefiting both large-scale industries and micro, small, and medium enterprises (MSMEs).
The Chief Executive, likewise, urged the Department of Finance and Bureau of Internal Revenue to craft the implementing rules and regulations that would streamline the VAT refund scheme, making the process “simple, accessible, and culturally inclusive.”
Meanwhile, Tourism Secretary Christina Frasco said that the landmark legislation boosts the Philippine tourism experience and elevates the country’s competitiveness as a global tourism destination.
“By allowing tourists to enjoy tax refunds on their purchases, we send a strong message that the Philippines is ready to embrace global standards while supporting local industries and businesses,” Frasco underscored.
“This law is more than an economic incentive; it is an invitation for the world to experience the creativity, craftsmanship, and hospitality that make our nation unique,” she added.
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