VAT refund for tourist purchases explored

Published by rudy Date posted on August 15, 2009

MANILA, Philippines – The National Tax Research Center is supporting a Senate resolution proposing the implementation—although with a very limited scope—of a refund on value-added tax for foreign tourists and balikbayans in an effort to encourage greater tourist arrivals.

Filed by Sen. Miriam Defensor-Santiago, Senate Resolution No. 928 directs the “proper Senate committee” to study the possibility of offering a VAT refund for purchases made by foreigners in retail stores.

The proposal is based on the idea that sales made to foreigners and balikbayan tourists who bring the goods outside the Philippines are considered exports and, thus, should not be taxed.

Under the law, balikbayans include overseas Filipino workers and Filipinos who have been abroad continuously for at least a year—including accompanying spouses and children—as well as former Filipino citizens.

According to the NTRC, a part of the Department of Finance, the VAT refund is hoped to increase the flow of tourism and help generate businesses that would offset revenues that would be lost.

However, the NTRC clarified that such a refund can only apply to purchases made in duty-free shops since these are the only stores in the country that accept foreign currency as payment.

Also, the NTRC recommended that—to minimize abuse—the refund system should include specific requirements on who can claim, where to claim and how to claim the rebate.

Further, the system must set a minimum sales amount that “should be neither too low so as to open the privilege to abuse nor … too high so as to defeat the purpose.”

The NTRC cites a threshold of $20, which is the minimum purchase set in other countries or $30.

The agency estimates that the government may forego revenues of P188.4 million a year if the threshold was $20 and P282.5 million if $30.

“The threshold should be accompanied by the setting up of strict procedural requirements and safety measures in the availment of the refund so as not to deplete the much needed revenues of the government,” the NTRC said. –Ronnel Domingo, Philippine Daily Inquirer

July 2025

Nutrition Month
“Give us much more than P50 increase
for proper nutrition!”

Invoke Article 33 of the ILO Constitution
against the military junta in Myanmar
to carry out the 2021 ILO Commission of Inquiry recommendations
against serious violations of
Forced Labour and Freedom of Association protocols.

Accept National Unity Government (NUG)
of Myanmar.  Reject Military!

#WearMask #WashHands #Distancing #TakePicturesVideosturesVideos

Time to support & empower survivors. Time to spark a global conversation. Time for #GenerationEquality to #orangetheworld!

July


3 July – International Day of Cooperatives
3 Ju
ly – International Plastic Bag Free Day
 
5 July –
World Youth Skills Day 
7 July – Global Forgiveness Day
11 July – World Population Day 
17 July – World Day for
International Justice
28 July – World Nature Conservation Day
30 July – World Day against Trafficking in Persons 


Monthly Observances:

Schools Safety Month

Nutrition Month
National Disaster Consciousness Month

Weekly Observances:

Week 2: Cultural Communities Week
Micro, Small, and Medium Enterprise
Development Week
Week 3: National Science and
Technology Week
National Disability Prevention and
Rehabilitation Week
July 1-7:
National Culture Consciousness Week
July 13-19:
Philippines Business Week
Week ending last Saturday of July:
Arbor Week

 

Daily Observances:

First Saturday of July:
International Cooperative Day
in the Philippines

Categories

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Ut elit tellus, luctus nec ullamcorper mattis, pulvinar dapibus leo.