House Speaker Ferdinand Martin Romualdez said on Monday that a law recently signed by President Ferdinand Marcos Jr., which grants value-added tax (VAT) refunds to non-resident tourists, is expected to boost both the country’s tourism industry and domestic sales.
“This piece of legislation will greatly boost international tourism and the sale of goods by tourist-oriented establishments,” Romualdez said.
He emphasized that the VAT refund incentive would encourage tourists to buy locally produced goods, thereby stimulating economic activity.
The law, officially known as “An Act Creating a VAT Refund Mechanism for Non-Resident Tourists,” amends the National Internal Revenue Code of 1997 by adding a new section 112-A.
Romualdez pointed out that countries with high rates of international tourism, such as Singapore and Japan, offer VAT refunds to attract tourists.
“Just ask Filipinos who have visited Japan, and they will tell you that they patronize these megastores not only for the products they sell at lower prices but also for the tax refunds,” he said.
Under the new law, non-resident foreign passport holders can apply for a refund if they purchase products from accredited stores, provided the items are taken out of the country within 60 days of purchase and are worth over P3,000.
According to the National Economic and Development Authority (NEDA), the law is expected to generate an additional P3.3 billion to P5.7 billion in revenues from 2024 to 2028 and create 4,000 to 7,100 jobs annually.
