Manila: The launch of the value-added tax (VAT) refund mechanism for foreign tourists is a crucial step in positioning the Philippines as a premier travel destination in the region, Senator Sherwin Gatchalian said Tuesday. Gatchalian stated that the long-awaited measure is expected to spur tourism-driven development beyond urban centers, with tourists' spending helping to fuel local economies, boost consumption, and create jobs.

According to Philippines News Agency, the senator emphasized the importance of efficient and hassle-free implementation by the Department of Finance (DOF), noting that the success of the program lies in its execution. The implementing rules and regulations (IRR) of Republic Act No. 12079, or the VAT Refund for Non-Resident Tourist Act, was signed Monday by Finance Secretary Ralph Recto, Bureau of Internal Revenue Deputy Commissioner Marissa Cabreros, and Bureau of Customs Commissioner Bienvenido Rubio.

RA 12079 aims to attract more foreign tourists to shop and spend in the Philippines by allowing them to claim VAT refunds on qualified purchases, thereby stimulating economic activity. Under the IRR, non-resident tourists holding foreign passports may claim VAT refunds on locally purchased goods worth at least PHP3,000 from accredited stores.

These goods must be taken out of the country within 60 days of purchase and must be for personal use. Eligible items include retail and tangible goods such as clothing, electronics, jewelry, accessories, souvenirs, and consumables.