Philippines' President Ferdinand R. Marcos Jr. has signed a new law that will allow international tourists to claim a refund on the Value Added Tax (VAT) for purchases made in accredited stores in the Philippines. The law aims to encourage more spending by tourists and to promote local products.
In a ceremony at Malacañang, President Marcos highlighted the economic potential of the new scheme, noting that shopping is a key part of the travel experience.
"In 2023, the Philippine tourism sector played an instrumental role in our nation’s economic recovery, contributing an impressive 8.6% to the GDP," he said. He also pointed out that shopping was the second largest expenditure for inbound tourists.
Tourists can claim a VAT refund on purchases worth at least P3,000 (US$50), provided the items are taken out of the country within 60 days. The government expects the new measure to increase tourist spending by 30%, benefiting both large businesses and smaller enterprises, such as those producing Marikina shoes.
The Department of Finance (DOF) and the Bureau of Internal Revenue (BIR) will develop the rules and regulations for the program to ensure a smooth process. The DOF estimates the VAT refunds could range from P2.9 billion (US$49 million) to P4.1 billion (US$69 million) annually. However, these costs are expected to be offset by the anticipated boost in tourism and consumer spending.
“This VAT refund will make Philippine products more accessible to global consumers,” President Marcos added.