September 23rd, 2024
House Ways and Means Chair Joey Sarte Salceda (Albay, 2nd district) says that the House tax panel will recommend that the House adopt SB 2415 or the VAT refund on tourists, based largely on House Bill No. 7292, principally authored by Salceda.
“We are very amenable to the Senate version, which doesn’t really deviate much from the House version. Together with more modern airports and investments in the hospitality sector, we hope that the VAT refund for tourists will boost the country’s bid for more tourist dollars,” Salceda said.
“This was a direct instruction from President Marcos. So, no more delay from our end,” Salceda, the measure’s first principal author in Congress, added.
Salceda says he will recommend to Speaker Ferdinand Martin Romualdez that the House plenary adopt the Senate version, which “has no substantial or fundamental difference with the House version.”
Salceda says that “A simulated model shows that tourist spending on shopping, accounting for increased tourist arrivals as a result of the refund system, will increase to P76.58 billion, or a total increase of P17.6 billion in tourist sales, representing a growth by 29.8 percent.”
Salceda adds that the competition for tourism in Southeast Asia has intensified, with the region hosting some of the best airports.
“It’s part of a comprehensive strategy to bolster tourism. We are anticipating NAIA improvements with the privatization, as well as the new Bulacan Airport. We are boosting investments in tourism under the CREATE MORE Act. And now, we want foreign tourists to spend more here.”
“It’s consistent with basic principle, too. We shouldn’t really be charging foreign tourists VAT since it is a consumption tax, and they consume these products in their home countries.”
“Any well-travelled Filipino knows that one of the draws of touring abroad is that one can shop tax-free, with very efficient refund systems in places like Singapore and Japan.”
“Of course, this strategy needs to be coupled with intensified efforts to encourage tourists to buy local Filipino signature products, such as shoes from Marikina or our barongs and our weaves. That is why I intend to work with the Creative Industries Council to see how we can maximize this opportunity for our local creatives and artisans.”
Under the measure, purchases with a total of at least P3,000 and taken out of the country within 60 days of purchase will be allowed a VAT refund.
“Other countries typically charge a small percent of the VAT due as administrative fee, and I think this bill allows us to do that, too.”
Salceda says it is also an opportunity for the government “to practice doing VAT refunds faster. If the provider for this service does a great job, we can perhaps use the same system for our general VAT refund system.”