Marcos signs VAT Refund System for non-resident tourists
President Ferdinand Marcos Jr. signed a law granting value added tax (VAT) refunds to non-resident tourists.
Republic Act No. 12079, or the VAT Refund for Non-Resident Tourists, was enacted on Dec.9. The measure aims to attract more tourists to the country by providing a VAT Refund System for locally purchased goods.
This means tourists can now claim a refund on VAT for purchases made at accredited stores worth P3,000, provided these goods are taken out of the country within 60 days of purchase.
Marcos said that the new law aims not only to stimulate more spending but promote the Philippines as a "premier global shopping destination."
Likewise, the VAT refund scheme will "benefit both large-scale industries and micro, small, and medium enterprises (MSMEs)," with the projected economic impact of a 29.8% increase in tourist spending, as per Marcos.
The President Communications Office (POC) also said that the signed system aligns with the Department of Tourism's (DOT) National Tourism Development Plan (NTDP) 2023–2028, including infrastructure improvements and digital innovations "to enhance visitor experience."
The President also encouraged the Department of Finance (DOF) and the Bureau of Internal Revenue (BIR) to formulate rules and regulations to optimize the VAT refund procedure.
As per the DOF, the projected VAT refunds to visitors might amount to between P2.9 billion and P4.1 billion annually.
Nonetheless, the anticipated loss may be mitigated by a probable rise in visitor expenditure and an enhancement in inbound tourism.
In a statement, House Speaker Martin Romualdez said more tourist arrivals and increased purchases due to VAT refunds would result in more economic activities.
"This piece of legislation will greatly boost international tourism and the sale of goods by tourist-oriented establishments," he said.
Sen. Win Gatchalian, the author and sponsor of the measure in the Senate, said VAT refunds for tourists create "a more appealing environment" for visitors.
He added that the law is about the "long-term growth" of the tourism industry and economy.
