Govt VAT Refund Predicted to Increase Tourist Spending

The government’s decision to grant value-added tax (VAT) refunds for international tourists is predicted to increase the tourism industry’s recovery from the pandemic.

President Ferdinand Marcos Jr is anticipated to issue an executive order that imposes the VAT refund program for foreign tourists by the year 2024 said Malacañang.

“The VAT refund for tourists can (encourage) tourists to spend more here in the Philippines as this practice is also done in many developed economies with huge arrival figures,” mentioned John Paolo R. Rivera, an economist at the Asian Institute of Management.

Currently, the Philippines has a uniform 12% VAT on imports and sales of services in the country.

Several countries provide VAT refunds to travelers before departure such as Spain, France, Italy, and the like.

President Marcos Jr. likewise gave his approval towards other recommendations made by the Private Sector Advisory Council (PSAC) like the removal of the One Health Pass and the e-visa rollout by 2023, giving priority to Indian and Chinese nationals.

Aside from this, the PSAC had suggested the repeal of outdated advisories and loud-speaker announcements at all airports and the automatic inclusion of travel tax with all airline tickets.

“These are great initiatives to energize tourism and create more jobs… We need initiatives like this to become world-class, then world-beating,”  mentioned Francisco Alcuaz Jr., Makati Business Club Executive Director.

“With pandemic-related travel restrictions lifted, we Filipinos are ready to showcase the Philippines as a world-class tourist destination. PSAC is in support of the administration’s tourism agenda, particularly in boosting infrastructure and systems that will support the many travelers looking to discover the unique beauty of our country,” mentioned Robinsons Land Corp. President and Chief Executive Officer Frederick D. Go who also served as the PSAC Tourism Sector Lead.

Source: Business World