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Manila Bulletin devider Business devider Private sector: New VAT refund policy to attract more foreign shoppers

Private sector: New VAT refund policy to attract more foreign shoppers

Published Mar 26, 2025 04:38 am
Sabin Aboitiz.png
PSAC Lead Convenor and Aboitiz Group President and Chief Executive Officer (CEO) Sabin Aboitiz

The Private Sector Advisory Council (PSAC) said the implementation of a value-added tax (VAT) refund system is poised to be a “game-changer” for the country’s tourism industry, driving substantial economic growth.

PSAC said the refund scheme, embodied under Republic Act (RA) No. 12079, is one of its key recommendations to President Ferdinand “Bongbong” Marcos Jr.

PSAC Lead Convenor and Aboitiz Group President and Chief Executive Officer (CEO) Sabin Aboitiz recalled that this was a direct response to the President’s call to enhance the visitor experience in the country.

“We commend the government for swiftly acting on PSAC’s recommendations, ensuring that the Philippines remains a competitive global tourist destination,” Aboitiz said in a statement on Wednesday, March 26.

Enacted in December last year, the implementing rules and regulations (IRR) of RA 12079 was signed on Monday, March 24.

Under the law’s IRR, non-resident tourists on foreign passports can reclaim VAT on locally purchased goods from accredited stores worth at least ₱3,000—provided that these items are exported within 60 days.

Products eligible for refund are limited to clothing, electronics, jewelry, souvenirs, and other tangible goods intended for personal use.

Internationally recognized VAT refund operators will be tapped by the government to provide access to refund services, either electronically or in cash.

According to PSAC, the program is expected to increase tourist spending by at least 30 percent.

This will open new opportunities for micro, small, and medium enterprises (MSMEs) to ramp up their product offerings while showcasing the creativity and craftsmanship of Filipino artisans.

Finance Secretary Ralph Recto earlier said the refunds will have a multiplier effect of 1.97. Essentially, for every ₱100 spent by a tourist, ₱197 in economic output is generated.

The VAT refund program is part of a broader set of PSAC-backed initiatives, which also includes the expansion of hotel incentives under the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) Act.

These measures are part of PSAC’s commitment to further supporting the government’s long-term tourism strategy.

Related Tags

Private Sector Advisory Council (PSAC) VAT Refund System tourism industry
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