By Mayan Sangil, PRA
In a landmark move to bolster tourism and retail, President Ferdinand R. Marcos Jr. has signed into law Republic Act 12079, or the VAT Refund for Non-Resident Tourists Act. The new measure, which established a VAT Refund System for goods purchased locally by foreign tourists, is poised to enhance the Philippines’ competitiveness as a premier global shopping destination.
Under this groundbreaking law, non-resident tourists can claim refunds on the Value Added Tax (VAT) for goods they purchase from accredited retail outlets. To qualify, goods must be taken out of the country within 60 days, and transactions must meet a minimum value of Php3,000. This initiative aims to attract more international travelers, significantly boosting the tourism and retail sectors.
The Philippine Retailers Association (PRA), the country’s leading retail organization, has been a driving force behind this transformative measure. For the past two years, the PRA has been steadfastly shepherding the bill through its legislative journey, aligning it with its vision of positioning the Philippines as Asia’s premier shopping destination. The PRA actively participated in Senate and House hearings, as well as technical working groups, to ensure the successful passage of the law.
“We welcome the signing of the VAT Refund Scheme for Tourists. This should make us competitive in the tourism market, considering we are the only Asian country not offering VAT refunds for tourists,” said PRA President Bobby S. Claudio.
Lawmakers estimate that the new law could lead to a 30% increase in tourist spending, benefiting retailers from large-scale industries and micro, small, and medium enterprises (MSMEs). The anticipated boost underscores the law’s potential to revitalize the retail and tourism sectors while promoting inclusive economic growth.
The VAT Refund System aligns with the government’s goal of transforming the Philippines into a premier shopping destination in the region. By addressing the long-standing absence of VAT refunds for tourists, the law brings the country on par with other global and regional shopping hubs.
“Tourism and retail are interconnected engines of growth. This law not only strengthens the Philippines’ appeal to international visitors but also uplifts the local retail industry by providing an added incentive for tourists to spend more during their stay,” Claudio added.
With the VAT Refund for Non-Resident Tourists Act now in place, the Philippines is set to attract more foreign travelers, showcasing the country’s unique offerings while stimulating economic growth. The PRA remains committed to supporting initiatives that drive innovation and growth in the retail sector, reinforcing its role as a vital partner in nation-building.
