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Philippines: PRA pushes for VAT refund system for foreign tourists
MANILA, Philippines — The Philippine Retailers Association (PRA) is pushing for the implementation of a value-added tax (VAT) refund scheme for foreign tourists to encourage more tourist spending in the country.
In an interview with reporters, PRA chairman Paul Santos expressed support for the implementation of a VAT refund system for tourists, emphasizing that the Philippines is one of the few countries in ASEAN that is not implementing the tax refund scheme.
“We want to encourage tourists to do their shopping in the Philippines. Shopping is an integral part of the tourist experience. You go visit a country like Hong Kong or Singapore, apart from seeing the sites, eating, the next thing that you do is shop,” Santos said.
“We want to encourage that sort of behavior as well. What you want to do is encourage shopping across all the areas of the Philippines. You want tourists to spend more of their dollars or euros in Philippine shops. We look at the VAT and duty-free exemption extended to these visitors as well,” he said.
Latest available data from the Philippine Statistics Authority (PSA) showed that inbound tourism expenditures registered at P27.62 billion in 2021, down 79.2 from the P132.58 billion a year before.
Of the total expenditure, shopping accounts for an estimated six percent of the expenditures at P1.65 billion.
Compared to pre-pandemic levels, inbound tourism expenditures for shopping accounted for 11 percent of the P600 billion inbound tourism expenditure in 2019 at P66.128 billion.
“Other countries have done it, with much success on their part. I think it is high time for the country to implement a similar scheme,” Santos said.
“We suspect that it will require legislation from Congress to make it work. But the President himself has endorsed it, so we will probably see some action from the Congress when they resume sessions in July,” he said.
In January, the Presidential Communication Office (PCO) said President Marcos approved the implementation of the VAT refund program for foreign tourists by 2024 in an effort to boost tourist arrivals in the country.
It said Marcos would l issue an executive order to implement the tax refund program.
Source: https://www.philstar.com/business/2023/05/10/2265052/pra-pushes-vat-refund-system-foreign-tourists