President Ferdinand R. Marcos Jr. has signed a new law that will make the Philippines a more attractive shopping destination for international visitors. The law, known as Republic Act 12079, introduces a VAT Refund System for non-resident tourists, allowing them to reclaim the Value Added Tax on goods bought within the country.
Under this new regulation, tourists can receive a refund on the VAT for items purchased at approved retail stores, provided the goods are exported within 60 days and the purchase meets a minimum value of PHP3,000. This move is expected to significantly enhance the Philippines’ appeal as a shopping destination, competing with other global markets that offer similar incentives.
Marcos highlighted that this initiative will not only boost tourism but also increase the visibility and sales of authentic Filipino products worldwide. He anticipates a 30 percent rise in tourist expenditure, which will benefit both large corporations and small to medium-sized enterprises.
The President has instructed the Department of Finance and the Bureau of Internal Revenue to develop guidelines to ensure the VAT refund process is efficient and user-friendly. Speaker Martin Romualdez emphasized that the law will stimulate economic activity by attracting more tourists and encouraging them to buy local products.
Romualdez pointed to successful examples in Japan and Singapore, where tax refunds have significantly increased tourist spending. He noted that the new law is projected to generate between PHP3.3 billion and PHP5.7 billion in additional revenue from 2024 to 2028, and create between 4,400 and 7,100 jobs annually.
Senator Sherwin Gatchalian, who played a key role in the Senate’s passage of the bill, stated that the VAT refund will make the Philippines more appealing to tourists, encouraging them to spend more on local goods. He assured that any potential revenue loss from the refunds would be offset by the economic growth spurred by increased tourism.
Department of Tourism Secretary Christina Garcia Frasco praised the new law, stating it aligns the Philippines with global standards and supports local businesses. She highlighted that the law will showcase the country’s unique creativity and hospitality, making it a more attractive destination for global travelers. Frasco also mentioned that shopping-related tourism expenditure reached PHP137.4 billion in 2023, and the VAT refund program is expected to further increase this figure by 29.8 percent, benefiting micro, small, and medium enterprises and driving economic growth.
The VAT refund mechanism is part of broader efforts under the National Tourism Development Plan 2023–2028, which includes infrastructure improvements, better accessibility, and digitalization initiatives.