The enactment into law of the measure providing for a Value Added Tax (VAT) Refund Mechanism for non-resident tourists will boost tourist arrivals in the Philippines beginning next year, Sen. Sherwin Gatchalian said.

Gatchalian, chairman of the Senate Committee on Ways and Means, said he is optimistic that starting January 2025, the Philippines can expect increase in tourist arrivals once the VAT refund mechanism is in place.

“We expect the increase in tourist arrivals to translate to employment opportunities across tourism-related industries such as hotels and hospitality, transportation, travel facilitation and entertainment, among others, following the law signed by the President this morning in Malacañang,” Gatchalian said.

The senator sponsored and authored the said measure with the aim of making the Philippines at par with its Asian neighbors that benefitted in the VAT refund scheme.

At the same time, he said the measure is aligned with the Marcos administration’s efforts to boost tourism in the country.

“By allowing foreign visitors to claim VAT refunds on goods they purchase in our country, we create an environment that not only attracts more tourists but also encourages them to spend more on our products, which will eventually be taken out of the country,” he said.

Gatchalian assured that any revenue loss the government will incur as a result of this policy will be compensated by economic activities that the new law is expected to generate.

Citing the National Economic and Development Authority’s (NEDA) projection, the lawmaker said the fiscal reform is expected to generate P3.3 billion to P5.7-billion in tourism revenue yearly.

“The measure is about the long-term growth of our tourism industry and economy as a whole,” he stressed.