A House of Representatives panel has approved the substitute bill for the value-added tax (VAT) refund for outbound tourists, a proposal already approved in principle by President Ferdinand "Bongbong" Marcos Jr.

“I expect between P10 to 40 billion in increased sales from local suppliers. That has the same nature, consequence, and character as exports. And we don’t even have to compete with other exporters. The audience is already captured,” Salceda said in a statement following the bill's committee-level approval.

“Save for India and Cambodia, we are the last major Asian country without an operative VAT refund system for tourists. That hurts our competitiveness for tourists with, say, Vietnam and Thailand, which now receive more tourists than we do," noted the economist-solon.

Salceda principally authored the measure along with Nueva Ecija 1st district Rep. Mikaella Suansing, who chaired the technical working group (TWG) tasked with amending the original draft.

The proposal adds a new section to the National Internal Revenue Code, which outbound tourists to refund goods to be taken out of the country, with a per transaction value of at least P3,000. These goods must be purchased from accredited suppliers.

“A VAT refund, as global studies show, increases the propensity to spend. Generally, for every P1 refunded, the tourist spends an additional P1.50," Salceda said.

“That will create an additional 20,000 to 80,000 jobs, and will also improve our gross international reserves,” added the Bicolano.

The measure also allows the VAT refund system to be administered by a service provider, as is the practice in most jurisdictions.