The Value-Added Tax (VAT) Refund Program for foreign tourists, which was recently approved by President Ferdinand R. Marcos Jr., is a welcome development.
The program, which is set for implementation in 2024, is among the proposals the Private Sector Advisory Council (PSAC) presented to Marcos to boost the tourism industry. PSAC also recommended the issuance of e-Visa upon arrival to Chinese and Indian nationals, improving airport infrastructure and operations, and promoting tourism investment.
The VAT Refund Program should also be extended to Filipinos living or working abroad as an incentive for them to come home more frequently.
Certainly, the program will be another incentive to attract tourists in order to help revive the tourism industry, which is among the hardest-hit sectors by the Covid-19 pandemic.
With at least 69 countries already implementing their own refund programs, whoever has been tasked to craft the implementing guidelines should carefully study how these countries are carrying out their respective measures. From there, they can pick the best practices and adopt these or even improve on it for seamless and hassle-free implementation.
Limiting the steps in securing VAT refund to a bare minimum would certainly be a good step to begin with. A tedious procedure for refund will defeat the objective of the program. Red tape should be cut.
If it is possible that the refund be given at the point of sale or the store where the item was purchased, then it would be a big boost for the program. There would be less hassle for the tourist who is in the country for a limited period of time. These tourists should be given the opportunity to maximize their stay in the country.
Or, why not waive the VAT to spare the tourist from going through the refund procedure? Through this, time spent for securing the refund may be put to better use, like shopping or visiting tourist spots that would certainly redound to more revenue for the country.
Too much red tape, like what is experienced in some agencies, might defeat the objective of the VAT Refund Program—to boost the tourism industry.
This year, the Department of Tourism aims to attract 4.8 million tourists and projects to generate ₱2.58 trillion in revenue.
This will be a great improvement from the 2.65 million visitors — 2.02 million foreign nationals and 628,445 Filipinos based abroad—recorded from February to December 2022, and the 163,879 arrivals recorded in 2021.
These figures, however, are still a far cry from the pre-pandemic level of 8.26 million tourist arrivals.
Credit belongs to : www.mb.com.ph