The finance department is now studying the mechanisms of the value-added tax refund scheme for tourists (VRST), particularly the modality on how the government will implement the measure starting 2024.
“Right now we are trying to find out the most favorable modality—what is the global practice? I think it is [through] a third party that handles the [refund], usually at the airports instead of at the point of sale because it has a high leakage rate,” Finance Secretary Benjamin E. Diokno told reporters in an interview on Friday.
“We are starting it and we will implement it by 2024,” Diokno added.
Earlier this week, Malacañang said that President Ferdinand R. Marcos Jr. has approved the VRST as recommended by the Private Sector Advisory Council (PSAC) to attract more foreign tourists to the country. (Related story: https://businessmirror.com.ph/2023/01/30/manila-dangles-vrst-e-visas-to-tourists/)
The PSAC noted that the Philippines is the only Asian country without a VRST refund scheme as it is being implemented in 69 other countries.
While no details were made available, the scheme could be patterned after Singapore’s, where tourists who purchase goods and services more worth more than S$100 at participating shops and merchants, may claim a refund on the 7-percent goods and services tax (GST) paid, before departure from Changi Airport.
Tourists can either claim their refunds either in cash or via electronic means. The Presidential Communications Office said Marcos Jr. would be issuing an executive order to implement the VRST scheme.
Sen. Nancy Binay earlier asked the DOF to detail the implications of the VRST to the government’s revenue collections. (Related: https://businessmirror.com.ph/2023/01/31/agencies-told-to-ready-tourism-data-vrst-impact-on-revenue/).
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