Government officials formally signed the Implementing Rules and Regulations Act (IRR) 12079 or the Value-Added Tax (VAT) Refund for Non-Resident Tourists on March 24 at the Department of Finance (DOF) in Manila.
IRR 12079 was signed into law by President Ferdinand Marcos Jr. in December 2024, and aims to boost tourism and encourage more foreign tourists to shop and spend more in the country.
More tourists bolstering economic growth
DOF Secretary Recto cited that the country must establish a fully functional VAT refund system and a surge in inbound tourism. “We want more tourists to come — we want them to stay longer, spend bigger, and transact with convenience,” he said.
DOT Secretary Christina Garcia Frasco has expressed optimism that the newly implemented VAT refund for tourists will significantly enhance the country’s tourism sector. “The signing of the VAT refund law by our President and the subsequent signing of the IRR therefore come at an opportune time for our country, where tourism spending is at an all-time high. According to the World Travel and Tourism Council, in comparison with our ASEAN neighbors, tourists that come to the Philippines spend the highest per capita at no less than 2,073 US dollars. And we foresee that with the implementation of this VAT refund act, we would be able to inure more benefits for our local tourism stakeholders in the component of shopping tourism,” she said.
Frasco emphasized that this initiative aims not only to make the Philippines a more appealing shopping destination but also to drive economic growth by encouraging higher tourist spending.
VAT refund process
Under the IRR, non-resident tourists or foreign passport holders may apply for a VAT refund for locally purchased goods from accredited stores that are equivalent to at least P3,000. To qualify, the good must be physically taken out of the the country within 60 days of purchase.
The VAT refund applies only to retail and tangible goods such as clothing, apparel, electronics, gadgets, jewelry, accessories, souvenirs, food or non-food consumables, and other goods intended for personal use.
Cascading gains
Secretary Frasco also underscored the significant economic implications of the measure that will be extensive, not only affecting the retail sector but also benefiting various industries through increased income from shopping, accommodations, transportation, and other related services.
Also present during the ceremonial signing were representatives from key agencies and tourism stakeholders, including DOT Chief of Staff and Undersecretary Shahlimar Hofer Tamano; Duty Free Philippines Corporation (DFPC) Acting Chief Operating Officer Patrick Joel M. Cinco; Philippine Retirement Authority (PRA) General Manager and CEO Roberto “Bob” Zozobrado; Tourism Promotions Board (TPB) Chief Operating Officer Maria Margarita Montemayor Nograles; Department of Information and Communications Technology (DICT) Director Dennis Morales; and other government officials.
Joining from the tourism and retail sectors were Association of Tourism Officers of the Philippines (ATOP) President Junel Andaya Divina; Megaworld Hotels and Resorts Group General Manager Arturo Boncato Jr.; Filinvest Hotels Senior Vice President Francis Gotianun, and Philippine Retailers Association (PRA) President Roberto S. Claudio Sr.
Also in attendance were Philippine Hotel Owners Association (PHOA) President Arthur Lopez; PHOA Executive Director Benito Bengzon Jr.; Pacific Asia Travel Association (PATA) Philippines Chapter Chairperson Maria Paz Alberto; Philippine Travel Agencies Association (PTAA) Evangeline Tankiang Manotok, and Philippine Tour Operators Association Inc. (PHILTOA) President Arjun Shroff, among others.