Cover President Ferdinand Marcos, Jr signed the landmark Republic Act 12079, known as the “VAT Refund for Non-Resident Tourists”, on December 9 during a ceremonial signing at Malacañang Palace. The new law is poised to position the Philippines as a premier global shopping destination (Photo: Courtesy of the Department of Tourism)
President Ferdinand Marcos, Jr signed the landmark Republic Act 12079, known as the “VAT Refund for Non-Resident Tourists”, on December 9 during a ceremonial signing at Malacañang Palace. The new law is poised to position the Philippines as a premier global shopping destination (Photo: Courtesy of the Department of Tourism)
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The Philippines has introduced a VAT refund programme for tourists, designed to elevate the nation’s tourism sector
In a move to enhance the Philippines’ allure as a travel destination, President Ferdinand “Bongbong” Marcos Jr has signed into law a Value-Added Tax (VAT) refund programme for non-resident tourists. Republic Act (RA) 12079—or the VAT Refund for Non-Resident Tourists—is aimed at stimulating economic growth through increased tourist spending, bolstering the tourism sector and showcasing Filipino craftsmanship.
Speaking at the ceremonial signing in Malacañang on December 9, Marcos emphasised that the law aligns with global tourism trends. “Shopping has become an essential part of the travel experience, and we are poised to capitalise on that momentum,” he remarks. The programme allows non-resident tourists to reclaim VAT on purchases exceeding PhP 3,000 from accredited stores, provided the goods leave the country within 60 days.
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Above President Ferdinand Marcos, Jr stands with tourism leaders and stakeholders at Malacañang Palace following the signing of the VAT Refund for Non-Resident Tourists law (Photo: Courtesy of the Department of Tourism)
President Ferdinand Marcos, Jr stands with tourism leaders and stakeholders at Malacañang Palace following the signing of the VAT Refund for Non-Resident Tourists law (Photo: Courtesy of the Department of Tourism)
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Several countries have successfully implemented VAT refund systems to attract tourists and stimulate local economies. For instance, Singapore allows tourists to reclaim VAT on eligible purchases via the eTRS system, streamlining refunds at major exit points. Similarly, South Korea offers automated VAT refunds at airports. Meanwhile, Gulf Cooperation Council (GCC) countries like the UAE and Bahrain have integrated VAT refund processes at airports and border crossings through operators such as Global Blue, simplifying claims for visitors.
The new law tasks the Department of Finance (DOF) and the Bureau of Internal Revenue (BIR) with crafting implementing rules to ensure a seamless and inclusive refund process. Tourists will have the option of cash or electronic refunds, facilitated by globally recognised operators engaged by the government.
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The Department of Tourism (DOT) reports over 3.1 million international visitors in the first half of 2024—a significant increase from 2023. Tourism receipts reached PhP 282.17 billion mid-year, a 32.81 per cent rise from 2023. This resurgence stresses the importance of initiatives like the VAT refund programme in sustaining growth and enhancing the country’s global appeal.
And while the DOF projects annual VAT refunds of PhP 2.9 billion to PhP 4.1 billion with the programme, it anticipates a significant offset through increased tourist spending, projected to rise by 30 per cent. It is expected to benefit not only major retailers but also micro, small, and medium enterprises (MSMEs), including producers of iconic Filipino goods such as Marikina shoes and handwoven textiles.
“These products tell our story,” Marcos notes, “and with the VAT refund, they will become more accessible to global consumers, further elevating our stature in the international market.”
Above Department of Tourism (DOT) Secretary Christina Garcia Frasco at Malacañang Palace (Photo: Courtesy of the Department of Tourism)
Department of Tourism (DOT) Secretary Christina Garcia Frasco at Malacañang Palace (Photo: Courtesy of the Department of Tourism)
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Tourism Secretary Christina Frasco also highlights the broader economic implications, citing tourism’s PhP 3.36 trillion contribution to the economy. She notes that increased spending could generate employment and invigorate local industries.
“This law is more than an economic incentive; it is an invitation for the world to experience the creativity, craftsmanship, and hospitality that make our nation unique,” she says.
Despite economists’ calls for prioritising tourism infrastructure and visitor experience improvements, the government claims that the VAT refund programme is a strategic step towards positioning the Philippines as a premier shopping destination in Southeast Asia. Beyond economic gains, it underscores the country’s cultural heritage, presenting its craftsmanship and creativity to the global market.
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Angela Nicole Regis Guiral is a digital editor at Tatler Philippines. She studied journalism and has since written features that look closely at how culture, lifestyle and social impact converge, while occasionally wandering into the worlds of style and travel.
