By Business World
The Philippine Retailers Association (PRA) backed a value-added tax (VAT) refund scheme for foreign tourists, saying it will support international arrivals and boost the retail industry.
Paul A. Santos, PRA chairman, told reporters on the sidelines of a furniture trade show launch on May 8 that the Philippines is “one of the few countries left” that has no such VAT refund scheme.
Philippine purchases are subject to the 12% VAT on goods and services.
“What you want to do is encourage shopping in all the areas of the Philippines. You want tourists to spend more of their dollars or euros in Philippine shops,” Mr. Santos said.
“We want to encourage tourists to do their shopping in the Philippines. Shopping is an integral part of the tourist experience. You go visit Hong Kong or Singapore, apart from seeing the sites and eating, the next thing that you do is shop,” he added.
Mr. Santos said Singapore, Thailand, and Malaysia have VAT refund schemes.
On March 6, the House of Representatives approved House Bill No. 7292 on third and final reading. The measure will allow VAT refunds for foreign visitors on purchases worth at least P3,000.
The bill authorizes the Finance Secretary, upon recommendation of the Internal Revenue commissioner and the Tourism Secretary, to adjust the P3,000 limit based on the administrative costs of processing refunds, inflation, and other considerations.
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