Philippines president approves a value-added tax refund program to attract tourists

With the world facing a difficult economic situation due to global tensions, the aftermath of Covid, and other issues, every country is trying to attract money as best as it can. When it comes to the Philippines, the nation is hoping to boost tourism, and has recently made a step towards that goal.

According to the statement published by the Philippines’ Presidential Communications Office this Sunday, the country’s president, Ferdinand Marcos, just approved a value-added tax refund program for foreign tourists by 2024. The idea is to attract visitors to the country, which will help with its economic recovery.

A VAT refund for all foreigners who visit

The Southeast Asian country, which consists of over 7,100 islands, typically collects a 12% VAT on any goods consumed within the nation. However, in order to attract visitors who would spend money in the country, the Philippines is willing to allow foreigners to get a VAT refund on the items that they are taking out of the country.

This is actually a deal that many other countries already offer, and a measure that emerged among a number of other proposals that the private sector had recommended to the president. Their proposals were all aimed at boosting the tourism industry, and some other recommendations included things such as improving airport infrastructure and operations and promoting tourism investments.

President Ferdinand Marcos also approved the launch of an online visa for tourists from a number of different countries, including South Korea, Japan, India, and China.

The Philippines tourism is slowly recovering from the pandemic

According to the data collected by the country’s government, the Philippines recorded around 2.65 million foreign visitors in 2022. Given the difficult traveling conditions of 2020 and 2021, the country’s Department of Tourism did not aim particularly high when giving its 2022 tourism prediction.

They expected to see 1.7 million tourists, so the arrival of 2.65 million came as a pleasant surprise. More importantly for the country, these travelers brought in around $3.68 billion in revenue.

Of course, not all of the tourists were foreign nationals, although the majority were. The data shows that around 2.02 million were, in fact, foreigners. However, 628,445 remaining individuals who entered the country in 2022 were Filipinos who were based abroad. Their number is also significantly higher than the 163,879 tourists who came back to the country in 2021.

Of course, both figures pale in comparison to the pre-pandemic number, which was averaging at 8.26 million annually. With its new tourism-boosting plan, the local government intends to boost the number of yearly visitors and at least double it to 4.8 million tourists moving forward.