He said this will allow foreign tourists to get a rebate of the 12% VAT on goods they bought from the Philippines, similar to the practice of other countries.
The increase in the sale of locally made products will benefit not only micro, small and medium enterprises, but bigger companies as well.
“This will also generate employment for our people,” Estrada said.
Estrada, chairperson of the Senate Committee on Labor, Employment and Human Resources Development, has filed Senate Bill No. 2148, titled “An Act Creating a VAT Refund Mechanism for Non-Resident Tourists, adding for the purpose a new Section 112-A to the National Internal Revenue Code of 1997, as amended.”
Under the bill, tourists shall be eligible for a VAT refund on goods costing at least P3,000 purchased from authorized retailers in the country, within 60 days from the date of purchase.
The value of goods per transaction should amount to at least P3,000 and the secretary of the Department of Finance, upon the recommendation of the secretary of the Department of Tourism and the commissioner of the Bureau of Internal Revenue, is authorized to adjust the threshold based on administrative costs of processing refunds, inflation, and other market conditions.
“Many studies have pointed out the multiplier effect of tourism. Direct spending may be a predominant contributor to GDP (gross domestic product), but indirect effects are also significant, suggesting a strong linkage with the local economy and in job generation,” Estrada said.