VAT Refund For Tourists Pushed

The Philippines' drive to become Asia's shopping hub could receive a significant boost if the government fully implements an electronic visa system and a value-added tax (VAT) refund scheme for foreign travelers, according to Secretary Frederick Go, Special Assistant to the President for Investment and Economic Affairs.

The Philippines may refund 60 to 90 percent of the VAT to foreign tourists, guided by the range of VAT refunds given by other Asian countries.

Go emphasized the country's potential to be the shopping capital of Asia, stating, “We need e-visas to become a shopping capital. That means attracting visitors from all over the world to come here and enjoy shopping. So we need e-visas. We need to make it easier for travelers to come to the Philippines.”

He also expressed support for the proposal to implement a VAT refund for non-resident tourists, adding, “Practically every country in Asia has a VAT refund for tourists; we don't.”

The Philippines may refund 60 to 90 percent of the VAT to foreign tourists, guided by the range of VAT refunds given by other Asian countries, Go noted.

Go, the Marcos administration’s economic czar, underscored, “We need to have those two as basic. These are what you call very basic, very fundamental to becoming a shopping capital.”

He shared that the Philippine Retailers Association (PRA) has been advocating for the implementation of the VAT refund for non-resident tourists.

PRA president Roberto Claudio stressed that this VAT refund would support the growth of the country’s retail sector.

Claudio added that, aside from the VAT refund scheme, the PRA is pushing for the removal of the “de minimis rule,” which exempts online shipments from customs duties if they are below a certain value.

The PRA also urged the government to swiftly implement the Internet Transactions Act to level the playing field between online merchants and brick-and-mortar retailers. The group highlighted that the retail sector contributes an average of PHP750 billion annually to the economy, providing 5 million jobs for Filipinos.