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Manila Bulletin devider Business devider PSAC lauds new law granting VAT refunds to tourists

PSAC lauds new law granting VAT refunds to tourists

Published Dec 12, 2024 06:25 am

The Private Sector Advisory Council (PSAC) applauded the signing into law of a measure granting value-added tax (VAT) refunds to non-resident tourists.

In a statement, Sabin Aboitiz, PSAC lead convenor and Aboitiz Group president and chief executive officer, said the new law, a key council recommendation, is expected to stimulate the economy by encouraging increased tourist spending within the Philippines.

“The VAT refund program will strengthen the Philippines' global competitiveness, drive economic growth, and generate jobs by encouraging higher spending on local goods and services,” said.

The measure is projected to increase tourist spending by 30 percent and provide additional support to micro, small, and medium enterprises (MSMEs).

The law allows non-resident tourists to claim VAT refunds on goods worth at least P3,000 purchased from accredited stores, as long as these items are taken out of the country within 60 days.

“This legislation embodies the productive collaboration between the private sector and the government,” Aboitiz said. “We commend Congress for swiftly enacting one of PSAC’s ‘Quick Wins’ recommendations for President Marcos.

The initiative seeks to promote Filipino craftsmanship and position the Philippines as a top global tourist destination.

Bobby Claudio, PSAC Tourism Sector Member and Vice Chairman for International Relations at the Philippine Retailers Association, added that the program has the potential to uplift local industries.

“This initiative not only aligns with global best practices but also highlights the unique creativity and entrepreneurial spirit of Filipino artisans. It fosters sustainable growth while promoting our diverse products to the world,” Claudio noted.

The VAT refund measure is part of a broader effort to enhance the tourism sector, including the launch of the e-Travel system in May to streamline immigration and customs procedures and the introduction of e-Visas for Indian nationals in October.

In addition, the government is actively working to increase the country's hotel capacity to match regional competitors by offering improved incentives for tourism-related investments.

On Nov. 11, 2024, President Marcos enacted the CREATE MORE Act, which incorporates PSAC's recommendations to encourage hotel expansions and renovations.

“Expanding the Philippines' hotel capacity is crucial for attracting more tourists and ensuring they experience world-class accommodations,” Lourdes Josephine Gotianun-Yap PSAC Tourism Sector Member and Vice Chairperson of Filinvest Development Corporation explained.

“The CREATE MORE Act establishes a robust foundation for tourism sector growth, ensuring we remain competitive with our regional peers,” she added.

With the Department of Tourism (DOT) aiming for over 445,000 hotel rooms by 2028, these measures are crucial to meet demand and promote sustainable economic growth.

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Sabin Aboitiz Private Sector Advisory Council enhances inclusive governance VAT refund for tourists
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