House adopts Senate’s tourist VAT refund bill

By Billy Begas

The House of Representatives has adopted the Senate’s version of the measure granting Value Added Tax (VAT) refunds to foreign tourists.

Senate Bill 2415 was adopted replacing House Bill 7292 during Tuesday’s plenary session.

Under the measure, a tourist shall be eligible for a VAT refund on locally purchased goods if the goods are purchased in person by the tourist in duly accredited stores; and such goods are taken out along with the tourist within 60 days from the date of purchase.

The threshold of P3,000 may be adjusted by the secretary of the Department of Finance (DOF) upon the recommendation of the Bureau of Internal Revenue (BIR) commissioner, taking into consideration the Consumer Price Index (CPI) as published by the Philippine Statistics Authority (PSA).

The DOF shall engage the services of one or more reputable and internationally recognized VAT refund operators that shall provide end-to-end solutions to the government for the establishment and operation of a VAT refund system for tourists, the bill stated.

With the adoption of the House, the measure will no longer pass through the bicameral conference committee and will be sent directly to the President for his signature.

House Committee on Ways and Means chairperson and Albay Rep. Joey Salceda said “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.”

“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,” Salceda said.

“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,” he added.