By Justine Irish D. Tabile, Reporter
THE PHILIPPINES must keep pace with the rest of the region in offering an attractive shopping experience to visitors, an appeal than can be enhanced with value-added tax (VAT) refunds, the retail industry said.
Philippine Retailers Association (PRA) President Roberto S. Claudio said the incentives to foreign shoppers proposed in Senate Bill (SB) No. 2415 promise a significant boost to tourism, and downplayed an economist’s view that visitors assign little importance to shopping here.
“Our tourism program must not only focus on the tourist experience in the Philippines. We must first offer attractive incentives to make them choose the Philippines as their choice of destination,” Mr. Claudio said via Viber.
“Because we are the only Asian country that does not offer a tax refund for tourist schemes, we suffer from the fewest tourist arrivals compared to all other Asian countries when it comes to attracting tourists, who all seem to love shopping when they are abroad,” he added.
At the weekend, Foundation for Economic Freedom President Calixto V. Chikiamco said developing health facilities in tourist spots and doing away with cumbersome immigration processes will likely help the tourism industry grow more than tax rebates.
The Senate started deliberating SB 2415, which aims to provide non-resident tourists with VAT refunds for purchases worth at least P3,000 to encourage more visitor spending.
A counterpart bill for the proposed measure was approved by the House of Representatives on March 6, 2023.
The Department of Tourism (DoT) is targeting international arrivals of 7.7 million this year. However, Tourism Chief Ma. Esperanza Christina G. Frasco described the goal as a “moving target,” noting the difficulties in attracting visitors from China.
Visitor arrivals totaled 3.62 million as of Aug. 7, representing 47% of the target set for the year.
Meanwhile, the DoT reported visitor receipts of P323.68 billion in the first seven months, up 13.2% from a year earlier.
According to Mr. Claudio, the PRA supports a VAT refund scheme for tourists, citing the scheme as necessary to be competitive in attracting visitors.
“There are eight countries in Asia and 61 countries in the rest of the world offering tax incentives for tourists. We never played the tax refund incentive card in the history of our tourism program,” he said.
“After we put up the incentive packages to attract tourists to choose the Philippines, then we focus on giving the tourist the best airport, hotel, and restaurant experience and onward travel modes to their resort or other attractions,” he added.
Citing a report by tax refund service provider Global Blue, he said that 80% of countries that offer tax refund schemes improved their tourist arrivals and expenditures.
