The Presidential Communications Office (PCO) notified on Sunday (Jan 29), Philippines’ President Ferdinand Marcos has signed a value-added tax (VAT) refund programme for foreign tourists by 2024 to attract more visitors.
The Philippines’ government collects a 12 per cent VAT on goods consumed within the South-east Asian country. The plan is to enable foreigners to get a VAT refund on items they are taking out of the Philippines, similar to what many other countries offer.
The PCO said in a statement, measure is from the proposals a private sector advisory council gave to Marcos recently to boost the tourism industry, which also includes improving airport infrastructure and operations and promoting tourism investment.
Marcos has also approved the launch of an online visa this year for Chinese, Indian, South Korean and Japanese tourists, it said.
The Philippines recorded 2.65 million international visitors last year, who brought in an estimated US$3.68 billion in revenue, exceeding its 2022 target of 1.7 million tourists, according to the Department of Tourism.
Last year’s total comprised of 2.02 million foreign nationals and 628,445 Filipinos based abroad, which compared with only 163,879 tourists recorded in 2021 and was still significantly lower than the pre-pandemic annual level of 8.26 million.
The government aims to boost visitor arrivals this year to 4.8 million tourists.
Value-Added Tax (VAT) is a form of sales tax. It is a tax on consumption levied on the sale, barter, exchange or lease of goods or properties and services in the Philippines and on importation of goods into the Philippines. It is an indirect tax, which may be shifted or passed on to the buyer, transferee or lessee of goods, properties or services.
Who are Required to File VAT Returns?
- Any person or entity who, in the course of his trade or business, sells, barters, exchanges, leases goods or properties and renders services subject to VAT, if the aggregate amount of actual gross sales or receipts exceed Three Million Pesos (Php3,000,000.00)
- A person required to register as VAT taxpayer but failed to register
- Any person, whether or not made in the course of his trade or business, who imports goods.
It was one of the “Quick Wins” recommendations the PSAC made to Marcos last Thursday in a bid to enhance the Philippine tourism industry.
The PSAC also pitched the inclusion of India in the country’s visa-upon-arrival list, removal of the One Health Pass, and the improvement of Philippine airport facilities.