Government officials are optimistic about the country’s economic prospects following the enactment of two laws which aim to boost tourism and strengthening food security.
Finance Secretary Ralph Recto said on Monday that he is optimistic about the country’s economic growth prospects in 2025 following President Ferdinand R. Marcos Jr.’s signing into law of Republic Act (RA) 12079 or the Value-Added Tax (VAT) Refund Mechanism for Non-Resident Tourists Act and RA 12078 or the Amendments to the Agricultural Tariffication Act.
In a statement, Recto said RA 12078 enhances the capabilities of the government to protect Filipino consumers by extending market interventions to stabilize rice prices during periods of volatility and to prevent manipulative pricing and hoarding.
“The refinements to the Rice Tariffication Law are essential for the effective management of the Filipino household’s fundamental staple,” Recto said.
RA 12079, meanwhile, introduces Section 112-A in the National Internal Revenue Code (NIRC) of the Philippines, which states that tourists shall be eligible for VAT refunds on locally purchased goods.
The law states that goods should be purchased by foreign tourists in duly accredited stores in person and should be taken out of the country by the tourist within 60 days from the date of purchase.
The value of goods purchased per transaction should be equivalent to at least PHP3,000 but the Secretary of Finance may adjust this threshold upon recommendation of the Commissioner of the Bureau of Internal Revenue (BIR), taking into consideration the consumer price index.
Refunds may be made electronically or in cash and shall be drawn out from the Special Account in the General Fund as provided under Section 106 of the Code.
“It is high time that the Philippines catches up with countries around the world that have long implemented a standard VAT refund system. This strategic initiative aims to encourage foreign tourists to spend more in our country, stimulating our domestic economy,” Recto said.
“With increased tourism spending, we will have higher revenues to collect and we can create more jobs, raise incomes, and accelerate economic growth,” he added.
Special Assistant to the President for Investment and Economic Affairs Secretary Fredrick Go, meanwhile, said the VAT refund law will help enhance the country’s appeal to international visitors.
“The enactment of the VAT refund law for non-resident tourists is a direct response to the clamor from local tourism groups, demonstrating our government’s responsiveness to our stakeholders,” Go said in a statement.
“By encouraging substantial spending from tourists, we aim to drive economic growth and create more opportunities for our people,” he added.
The BIR, likewise, noted that the VAT refund for tourist is an attractive feature for foreigners who want to save money on purchases made during their stay, boosting the nation’s appeal as a prime travel destination.
“The BIR supports the VAT refund mechanism for non-resident tourists law and the national government’s initiative of attracting more international tourists and travelers into the country. Excellent taxpayer service includes the granting of tax refund to taxpayers allowed by law to receive the same,” BIR Commissioner Romeo Lumagui Jr. said.
“This landmark law brings with it significant growth in tourism spending in the country, creating more economic growth in the sector, which in turn increases tax collections in the long-run,” he added. (PNA)
