Foreign tourists can now avail of value-added tax (VAT) refunds in the Philippines, the Department of Finance (DOF) said Monday, after signing implementing rules and regulations (IRR) for Republic Act No. 12079.
The law, aimed at boosting tourism and encouraging spending, allows foreign passport holders to claim VAT refunds on locally-purchased goods worth at least P3,000 from accredited stores.
The IRR, signed on March 24, 2025, by Finance Secretary Ralph Recto, Bureau of Customs (BOC) Commissioner Bienvenido Rubio and Bureau of Internal Revenue (BIR) Deputy Commissioner Marissa Cabreros, requires goods to be physically taken out of the country as accompanied baggage within 60 days of purchase.
The refund applies to retail and tangible goods, including clothing, electronics, jewelry and souvenirs.
“With a multiplier effect of 1.97, every P100 spent by a tourist generates P197 in economic output,” Recto said at the signing ceremony.
“More money spent by foreign tourists means more businesses created, more Filipino workers hired, more jobs provided, higher incomes for our people, and more revenues for the government,” he said.
Recto cited the need for a “fully functional VAT refund system” and increased inbound tourism to maximize the law’s potential. He vowed to ensure the process is “simple, accessible, and culturally inclusive.”
The IRR mandates the finance department to engage international VAT refund operators for end-to-end solutions, with refunds available electronically or in cash.
Recto also called on the Department of Tourism (DOT) to promote the Philippines as a tourist destination. The DOF supports infrastructure development to improve connectivity, he said.
He said the government would expedite the implementation of economic liberalization laws, including the CREATE MORE Act and the Public-Private Partnership (PPP) Code, to attract investments in the tourism sector.
“Tourists should leave the Philippines with more than just souvenirs. They should leave knowing that this is a country that delivers on its promises,” said Recto.