Breakthrough for tourism stakeholders as Philippines approves tax refund scheme for foreign visitors

Tourists in the Philippines are expected to benefit from the value-added tax refund scheme from 2024. The government also plans to simplify the entry process into the country by launching an e-visa upon arrival scheme and removing the One Health Pass {Photo: Philippine Department of Tourism}.

PHILIPPINES. In a key boost to the broader travel retail sector, President Ferdinand Marcos, Jr. has given the green light to a Value-Added Tax (VAT) refund scheme for foreign tourists starting 2024. The initiative is part of an ambitious evolving programme to attract more visitors to the country.

According to a news release by the Presidential Communications Office, this is part of a roadmap to strengthen the country’s tourism industry, including “improving airport infrastructure and operations, managing the national brand and image, as well as promoting tourism investments, among others.”

As tourism rebounds, the government rolls out new programmes to further boost visitor arrivals. Click on the image to expand {Photo: Presidential Communications Office}

The tax-refund scheme aims to encourage tourists to shop for more products in the Philippines. It allows them to claim VAT refunds on goods they can then take back to their home countries.

The government is expected to issue an executive order to implement the programme, a similar policy to many other countries. The President’s travel advisory group stressed that the same tax-refund policy for tourists is in place across 69 countries, and the Philippines is the only country in the region that does not have a tourist VAT-refund programme.

The government collects a 12% VAT on goods sold in the country.

Making Chinese entry easier

The President also approved the roll-out of e-visas upon arrival, with China and India on the priority list. He will also abolish an entry requirement dubbed One Health Pass to allow  easier arrival.

Importantly, the government also plans to include the travel tax within airline ticket pricing. Travel tax in the Philippines is usually not included in the airline ticket cost and passengers are still required to line up at the airport to pay it.

The proposed policies come as the Philippines targets bringing in almost 5 million foreign visitors in 2023. Last year the country recorded 2.65 million arrivals (2.02 million were foreign visitors while 628,445 were returning Filipinos). ✈


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