President Ferdinand R. Marcos Jr. has signed into law a measure establishing a Value Added Tax (VAT) Refund System for non-resident tourists, aiming to attract more visitors and promote the Philippines as a premier global shopping destination.
“It is no secret that shopping has become an essential part of the travel experience, and we are poised to capitalize on that momentum,” Marcos said during the signing ceremony in Malacañang on Monday, Dec. 9.
He noted that in 2023, the Philippine tourism sector contributed 8.6 percent to the GDP, with shopping emerging as the second largest expenditure for inbound tourists.
“With this in mind, we are introducing the VAT refund program for non-resident tourists—designed not only to stimulate more spending but to promote the Philippines as a premier global shopping destination,” Marcos said.
Under the new law, tourists can claim VAT refunds on purchases made at accredited stores worth at least P3,000, provided the goods are taken out of the country within 60 days.
The president’s speech highlighted the potential economic benefits of the measure, citing a projected 30 percent increase in tourist spending, which is expected to boost industries of all sizes, including micro, small, and medium enterprises (MSMEs).
To ensure smooth implementation, Marcos has directed the Department of Finance (DOF) and the Bureau of Internal Revenue (BIR) to craft streamlined and inclusive rules and regulations for the VAT refund system.
“As we move forward, I urge the Department of Finance and the Bureau of Internal Revenue to craft the implementing rules and regulations that would make this VAT refund process simple, accessible, and culturally inclusive,” Marcos said.
According to the DOF, the estimated VAT refund for tourists may range from P2.9 billion to P4.1 billion annually. However, the potential increase in tourist spending and boost in inbound tourism are expected to offset the projected revenue loss.
