The Private Sector Advisory Council (PSAC) said it supports President Ferdinand Marcos Jr.’s signing into law of a measure inspired by the council’s recommendation to offer value-added tax (VAT) refunds to non-resident tourists.
It said the initiative aims to stimulate tourism spending, promote Filipino craftsmanship, and position the Philippines as a premier global destination.
The new law allows non-resident tourists to claim VAT refunds for goods worth at least P3,000 purchased from accredited stores, provided these items are taken out of the country within 60 days.
The program is projected to boost tourist spending by 30 percent, creating significant opportunities for micro, small, and medium enterprises (MSMEs) showcasing locally made products.
“This legislation embodies the productive collaboration between the private sector and the government,” said Sabin Aboitiz, PSAC lead convenor and Aboitiz Group president and chief executive.
“We commend Congress for swiftly enacting one of PSAC’s ‘Quick Wins’ recommendations for President Marcos. The VAT refund program will strengthen the Philippines’ global competitiveness, drive economic growth, and generate jobs by encouraging higher spending on local goods and services,” he said.
Bobby Claudio, PSAC tourism sector member and vice chairman for international relations at the Philippine Retailers Association, emphasized the program’s potential to uplift local industries.
“This initiative not only aligns with global best practices but also highlights the unique creativity and entrepreneurial spirit of Filipino artisans. It fosters sustainable growth while promoting our diverse products to the world,” said Claudio.
The VAT refund measure is part of a series of PSAC-backed reforms aimed at bolstering the tourism sector. Earlier initiatives include the launch of the e-Travel system in May, simplifying immigration and customs processes, and the October rollout of e-Visas for Indian nationals, enabling online visa applications.
Complementing the VAT refund program is a government initiative to match the hotel capacity of neighboring countries by offering improved incentives for tourism-related investments.
President Marcos, on Nov. 11, 2024, enacted the CREATE MORE Act, a transformative law incorporating PSAC’s recommendations to encourage hotel expansions and renovations.
Key reforms include enabling income tax holidays (ITH) to begin when businesses start generating income and allowing a 50 percent deduction for reinvestments from taxable income.
PSAC is also advocating for tourism to be classified under Tier III incentives, granting six to seven years of ITH for hotel development projects.
“Expanding the Philippines’ hotel capacity is crucial for attracting more tourists and ensuring they experience world-class accommodations,” said Lourdes Josephine Gotianun-Yap, PSAC tourism sector member and vice chairperson of Filinvest Development Corp.
“The CREATE MORE Act establishes a robust foundation for tourism sector growth, ensuring we remain competitive with our regional peers,” she said.
With the Department of Tourism (DOT) targeting over 445,000 hotel rooms by 2028, these measures are pivotal to meeting demand while fostering sustainable economic growth. PSAC continues to collaborate with the DOT, TIEZA, and BOI to revise the Strategic Investment Priority Plan (SIPP) and drive impactful reforms that benefit the tourism industry and local communities alike.
PSAC tourism lead Lance Gokongwei, representing the Gokongwei Group, expressed gratitude to the President, Department of Tourism Secretary Christina Garcia-Frasco and the members of the Cabinet for their steadfast collaboration.
He highlighted the critical role of public-private partnerships in driving the growth and ensuring the sustainability of the Philippine tourism sector.
