Senator Win Gatchalian said the proposed value-added tax (VAT) refund measure for non-resident tourists should provide a seamless experience to ensure that its objective of attracting more tourists is realized.
“Customer experience is very important and what we want is a seamless experience when non-resident tourists claim the refund at the airport,” Gatchalian said.
The VAT refund process should be in a digital form similar to those adopted by countries such as Singapore to make it easier for foreign tourists to claim the VAT refund. A provision in the proposed measure should be able to prevent possible abuse by some unscrupulous individuals who might want to take advantage of the program.
The measure should include a provision on the accreditation of retailers that would be recognized for the VAT refund. Such an accreditation process would deter those who may attempt to defraud the government through the VAT refund program, according to Gatchalian. He emphasized that such an accreditation process should make it easier for micro and small enterprises to be included in the VAT refund scheme.
“I really want to give special attention to local products. This can be a good opportunity to promote local products because there are plenty of mom-and-pop stores that we need to accommodate and help join in the bandwagon of this VAT refund scheme,” he said.
The Senate Ways and Means Committee, which Gatchalian chairs, will also tackle the possibility of including overseas Filipino workers or Filipino expats based abroad in the VAT refund scheme.
The projected shopping revenue of about P9 billion can compensate for an estimated foregone revenue of P4 billion, Gatchalian pointed out, adding that the said tax reprieve is seen to contribute about P 12 billion to the country’s gross domestic product (GDP).
According to Gatchalian, the proposed measure could likely be enacted into law within the year, as he noted that the Philippines is the only remaining country in ASEAN that is yet to adopt a VAT refund program for foreign tourists. The proposed measure is seen to enhance the country’s competitiveness as a tourist destination in Asia and boost tourist arrivals to its pre-pandemic level of 8.2 million in 2019.
