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A retailers’ group expressed optimism following the final-reading approval of a bill that seeks to boost tourism by allowing foreign visitors to claim value-added tax (VAT) refunds on purchases of Philippine-made goods.
“Considering that shopping is the second biggest expense of any tourist worldwide, we are getting this benefit now to develop the retail industry, improve the sales performance by retailers, and at the same time improve the tourism industry,” Philippine Retailers Association president Roberto Claudio said during the 2024 Outstanding Filipino Retailers Awards on Wednesday.
Article continues after this advertisementClaudio said that this is one of the reasons why Thailand, Vietnam, and Singapore are getting more tourist arrivals compared to the Philippines.
FEATURED STORIES BUSINESS National ID gives more Filipinos ‘face value BUSINESS BIZ BUZZ: Unwinding Gogoro … quietly BUSINESS Polvoron maker seeks P500 million capital for expansionAccording to the government data, tourist arrivals in the first eight months increased by 10.85 percent to 3.7 million from last year’s 3.3 million visitors. This is equivalent to more than 90 percent of the overall visitors for the period.
READ: Senate okays bill on VAT refunds for foreign tourists
Article continues after this advertisementThe Senate Bill 2415 or An Act Creating a Vat Refund Mechanism for Non-Resident Tourists was approved earlier this week and is projected to generate around P3.3 billion to P5.7 billion annually from 2024 to 2028, according to the National Economic and Development Authority.
Article continues after this advertisementThe new measure is also expected to create between 4,400 and 7,100 additional jobs yearly until 2028.
Article continues after this advertisementIn a separate interview, SM Prime Holdings executive committee chairman Hans Sy welcomed the approval of the new measure. However, he noted that the implementation should be “very easy and simple.”
“It’s a very positive, a very welcome thing. Only, of course, the hesitation there is, let’s see. I just hope they can make it very easy and simple. If you go to countries like Japan, outright, they do the discount there as long as you show your passport. So, I hope we can do that,” Sy told reporters on the sideline.
Article continues after this advertisementREAD: On the path to 7.7M: Strategies to boost PH inbound tourism
Instead of replicating the refund processes of other countries that often leave visitors unable to claim their money back, Sy indicated it would be preferable for tourists to receive refunds instantly upon purchase.
“That’s why we, whatever we do, we always look at the long term. Making sure that everything is really done for them. That’s how we do our malls too. We do everything with the customers in mind for their convenience,” Sy added.
Under the bill, tourists who are foreign nationals and not residents of the Philippines can refund the 12-percent VAT imposed on goods that they purchase within 60 days before they leave the country. But the goods must have a value of at least P3,000.
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The measureezwin, however, is subject to the review of the Department of Finance (DOF) every three years. It also tasks the DOF to hire one or more well-known and trusted companies that specialize in VAT refunds.
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