Gov’t lifts VAT on foreign tourist purchases

Metro Manila, Philippines - Foreign visitors can now be granted a refund on value added tax (VAT) for purchases under the implementing rules and regulations (IRR) of the refund for non-resident tourists law released on Monday, March 24.

In a statement, the Department of Finance (DOF) said foreign passport holders can apply for a VAT refund for items bought from accredited stores that are at least P3,000 (roughly $52).

Applicable items include:

+ clothing

+ apparel

+ electronics

+ gadgets

+ jewelry

+ accessories

+ souvenirs

+ food or non-food consumables

+ and other goods intended for personal use.

“The goods must be physically taken out of the Philippines by the tourist as accompanied baggage within 60 days from the date of purchase,” the DOF said.

According to the IRR, the DOF should engage the services of “reputable and internationally recognized” VAT refund operators to provide end-to-end solutions.

Refunds can be made through electronic means or in cash.

Republic Act 12079, or the VAT refund for tourists, was signed into law on Dec. 9, 2024.

During the ceremonial IRR signing, Finance Secretary Ralph Recto said every P100 spent by a tourist generated P197 in economic output.

“Our shared goal should be clear: Tourists should leave the Philippines with more than just souvenirs,” he said in his speech.

“They should leave knowing that this is a country that delivers on its promises, a country that knows how to take good care of its guests, a country that doesn’t just welcome them with smiles - but with systems and policies that work,” Recto said.