Measure seen to boost tourism, provide jobs

HOUSE Committee on Ways and Means Chairman and Albay 2nd District Representative Joey Sarte Salceda on Tuesday approved the draft substitute bill for the value-added tax (VAT) refund for outbound tourists, a proposal already approved in principle by President Ferdinand “Bongbong” Marcos, Jr. when it was brought up by the Private Sector Advisory Council.

“I expect between P10 to 40 billion in increased sales from local suppliers. That has the same nature, consequence, and character as exports. And we don’t even have to compete with other exporters. The audience is already captured,” Salceda said.

“Save for India and Cambodia; we are the last major Asian country without an operative VAT refund system for tourists. That hurts our competitiveness for tourists with, say, Vietnam and Thailand, which now receive more tourists than we do,” he said.

Salceda principally authored the measure along with Senior Vice Chair Mikaella Suansing, who chaired the technical working group (TWG) drafting amendments to the original draft.

The proposal added a new section to the National Internal Revenue Code, which outbound tourists to refund goods to be taken out of the country, with a per transaction value of at least P3,000. These goods must be purchased from accredited suppliers.

“A VAT refund, as global studies show, increases the propensity to spend. Generally, for every 1 peso refunded, the tourist spends an additional 1.5 pesos,” Salceda said.

“That will create an additional 20-80 thousand jobs and will also improve our gross international reserves,” Salceda added.

The measure also allows the VAT refund system to be administered by a service provider, as is the practice in most jurisdictions.

Salceda also urged the Department of Tourism (DOT), represented in the hearings by Undersecretary Shireen Gail Pamintuan, to consider amendments to the Tourism Act or Republic Act (RA) No. 9593 to allow the DOT to grant promotional incentives for domestic tourists, particularly in the meetings, incentives, conferences, and exhibitions sector.

“I am also directing SVC Suansing to look into possible amendments on the matter,” Salceda said.

“I understand that it is the MICEs (Meetings, Incentives, Conventions, and Exhibitions) sector is the bulk tourism sector of the country. So, when you incentivize the MICEs sector, you incentivize tourists wholesale,” Salceda added.

“I am requesting the DOT to look into a more expansive definition of incentives for the domestic tourism sector,” Salceda urged.