Connect with us

Hi, what are you looking for?


Retailers back VAT refund scheme for foreign tourists

TOURISTS enjoy sightseeing and shopping along Calle Crisologo in Vigan, Ilocos Sur. Consumer spending is still expected to drive economic growth this year. — PHILIPPINE STAR/KRIZ JOHN ROSALES

THE Philippine Retailers Association (PRA) backed a value-added tax (VAT) refund scheme for foreign tourists, saying it will support international arrivals and boost the retail industry.

Paul A. Santos, PRA chairman, told reporters on the sidelines of a furniture trade show launch on May 8 that the Philippines is “one of the few countries left” that has no such VAT refund scheme.

Philippine purchases are subject to the 12% VAT on goods and services.

“What you want to do is encourage shopping in all the areas of the Philippines. You want tourists to spend more of their dollars or euros in Philippine shops,” Mr. Santos said.

“We want to encourage tourists to do their shopping in the Philippines. Shopping is an integral part of the tourist experience. You go visit Hong Kong or Singapore, apart from seeing the sites and eating, the next thing that you do is shop,” he added.

Mr. Santos said Singapore, Thailand, and Malaysia have VAT refund schemes.

On March 6, the House of Representatives approved House Bill No. 7292 on third and final reading. The measure will allow VAT refunds for foreign visitors on purchases worth at least P3,000.

The bill authorizes the Finance Secretary, upon recommendation of the Internal Revenue commissioner and the Tourism Secretary, to adjust the P3,000 limit based on the administrative costs of processing refunds, inflation, and other considerations.

Albay Rep. Jose Ma. Clemente S. Salceda, also the House Ways and Means committee chairman, said in February that the proposed VAT refund scheme for tourists could raise tourism receipts by 29.8%.

In January, President Ferdinand R. Marcos, Jr. gave the green light for the VAT refund program, saying he plans to issue an Executive Order. 

According to Mr. Santos, the refund process is likely to be document-intensive, judging from the practice in some jurisdictions.

“The most conservative scheme would be to apply for the tax refund, (which is) granted when all the documentation is presented on exit from the Philippines like how it is implemented in the European Union,” Mr. Santos said.

“Another variant would be issue the refund now, submit the documents at the airport, and if the tax authority doesn’t receive the documentation within x number of days, then the refund is reversed. That is how it is implemented in other countries. But I am guessing it will be more conservative,” he added.

Mr. Santos said he expects the refund scheme to “require legislation to make it work. But the President himself has endorsed it, so we will probably see some action from the Congress when it resumes session in July,” Mr. Santos said.

This year, the Tourism department is projecting 4.8 million international arrivals, against 2.65 million last year. — Revin Mikhael D. Ochave

Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!



Standing firm against hunger, Globe launches the Longest Hapag— a five-month nationwide food festival series. The campaign kicks off in time for the commemoration...

Editor’s Pick

<?xml encoding=”utf-8″ ??> Retail sales volumes have fallen this month compared with the same period last year, while staffing levels have dropped sharply, a...

Editor’s Pick

<?xml encoding=”utf-8″ ??> Retail sales volumes recovered slightly by 0.5 per cent in April as the sector was lifted by the Easter holidays, however...

Editor’s Pick

<?xml encoding=”utf-8″ ??> The number of small businesses planning to increase prices to their customers is set to rise dramatically this quarter, further fuelling inflationary pressures. A new...

Editor’s Pick

<?xml encoding=”utf-8″ ??> VivaCity, the transport technology scaleup transforming cities into smarter and more efficient places to live and work, has partnered with Transport...

Editor’s Pick

<?xml encoding=”utf-8″ ??> The Google-owned video platform has confirmed that it’s shutting down YouTube Stories in June. Stories first launched in 2018, and allowed...

You May Also Like


COVID-19 has had a significant impact on the mental health of Filipinos across different groups all over the archipelago. From frontline workers, parents balancing...


REUTERS By Luz Wendy T. Noble, Reporter The country’s foreign exchange buffers slightly increased as of end-October as the value of the central bank’s...


BW FILE PHOTO GROSS BORROWINGS by the National Government reached P2.6 trillion as of end-September as it continued to raise funds to respond to...


KARASOLAR.COM TENA, Ecuador — Ecuador’s rainforest Achuar people say their ancestors long dreamed of a “fire canoe” or “electric fish” that would let them...

Disclaimer: Respect, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2022 Respect Investment. All Rights Reserved.