The Senate has approved on third and final reading Senate Bill 2415, or the proposed Value Added Tax (VAT) Refund for Non-Resident Tourists, with a vote of 20-1-0. The bill aims to boost tourism by allowing foreign visitors to claim VAT refunds on goods purchased in the Philippines.
Senate Ways and Means Committee Chair Sherwin Gatchalian highlighted the bill’s potential to enhance the country’s tourism appeal. “By allowing foreign visitors to claim VAT refunds, we create an environment that not only attracts more tourists but also encourages them to spend more,” Gatchalian said, noting that the increased tourist spending will boost local industries and create jobs.
According to Gatchalian, this fiscal reform could generate between Php3.3 billion to Php5.7 billion annually from 2024 to 2028 and create up to 7,100 new jobs per year. “The revenue loss we may incur from these refunds will be offset by the increased spending of tourists,” he added.
Senate Minority Leader Aquilino Pimentel III cast the lone negative vote, citing concerns over potential tax leakages. He argued that the refund fund, sourced from Filipino taxpayers, could be misused. “We are effectively giving away Four Billion Pesos of Filipino taxpayers’ money to foreigners,” Pimentel stated, proposing instead that the funds be directed to projects benefiting Filipinos.
Pimentel also called for a robust tracking mechanism to ensure that VAT refunds given to tourists do not exceed the VAT they paid, warning that implementation costs could outweigh the program’s projected benefits.
