Local retailers welcome release of the draft IRR on the VAT refund measure.
MANILA, Philippines – The Philippine Retailers Association has welcomed the release of the draft implementing rules and regulations (IRR) that will operationalize the value-added tax (VAT) refund measure.
The measure aims to implement a refund process for foreign tourists, making shopping in the Philippines more attractive compared to neighboring countries with similar VAT refund schemes.
“We are supporting that. It will encourage more people to do their shopping here,” PRA President Roberto Claudio told the Inquirer in a phone interview last week.
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He said that a well-implemented VAT refund system could boost the retail sector by attracting higher spending from international visitors, particularly in major shopping hubs like Metro Manila and Cebu.
Claudio added that the success of the program would depend on the efficiency of the refund process and the level of awareness among tourists.
He urged the government to ensure smooth implementation, including clear guidelines for both retailers and consumers, to maximize the benefits of the program.
The Department of Finance released the draft IRR last March 12, prescribing the initial guidelines and standards for the planned VAT Refund System (VRS).
The draft IRR show that tourists may qualify for a VAT refund on locally purchased goods if the items are bought in person from accredited stores and are taken out of the Philippines as accompanied baggage within 60 days of purchase.
The VAT refund applies exclusively to retail and tangible goods, including electronics, clothing, gadgets, accessories, souvenirs, consumables, and other items intended for personal use.
The minimum purchase amount per transaction was pegged at P3,000, documented under a single invoice registered with the Bureau of Internal Revenue (BIR).
Claudio announced that a public consultation on the draft IRR is scheduled for March 17.
According to the PRA official, the local retail industry is projected to grow between 5 percent and 10 percent this year, reaching an estimated P5 trillion in gross value.