PH Now VAT-Free for Foreign Tourists, Says Finance Department

The Department of Finance has assured that the system will be simple, accessible, and culturally inclusive for foreign tourists.   

Foreign tourists traveling to the Philippines can now enjoy a trip free of any value-added tax (VAT). 

According to the Department of Finance (DoF), the Implementing Rules and Regulations (IRR) of Republic Act No. 12079, or the VAT Refund for Non-Resident Tourists, has already been signed. RA 12079 aims to encourage foreign tourists to shop and spend more when they’re in the country. 

The IRR for RA 12079 was signed by DoF Secretary Ralph Recto, Bureau of Customs (BOC) Commissioner Bienvenido Y. Rubio, and Bureau of Internal Revenue (BIR) Deputy Commissioner Marissa O. Cabreros. 

Department of Tourism (DOT) Secretary Christina Garcia-Frasco, Office of the Special Assistant to the President for Investment and Economic Affairs (OSAPIEA) Secretary Frederick D. Go, and Department of Trade and Industry (DTI) Secretary Maria Cristina Aldeguer-Roque were also present at the signing. 

What Being VAT-Free Means 

Non-resident tourists or foreign passport holders can now apply for a VAT refund, according to the IRR. However, this only applies to locally purchased goods from accredited stores. Purchases must also be equivalent to at least PHP PHP 3,000.

In addition, the purchases must be physically taken out of the country by the tourist as accompanied baggage within 60 days from the date the purchase was made. 

It should be noted that, according to the DoF, the VAT refund online applies to the following retail and tangible goods:

• Clothing and apparel
• Electronics and gadgets
• Jewelry and accessories
• Souvenirs
• Food or non-food consumables
• Other goods intended for personal use

How the PH Economy Benefits 

According to Secretary Recto, the Philippines will enjoy double the economic returns from making the country VAT-free for foreign tourists. 

“With a multiplier effect of 1.97, every PHP 100 spent by a tourist generates PHP 197 in economic output,” Recto said during the IRR signing. Imagine that.”

“And more money spent by foreign tourists means more businesses created, more Filipino workers hired, more jobs provided, higher incomes for our people, and more revenues for the government to collect,” he added. “That’s the simple formula for growth.” 

He likewise emphasized the role that the DOT plays in marketing the Philippines as the best place for foreign tourists to visit and spend their money in. Recto further emphasized that the aim is for “more tourists to come — and we want them to stay longer, spend bigger, and transact with convenience.” 

“Our shared goal should be clear: Tourists should leave the Philippines with more than just souvenirs. They should leave knowing that this is a country that delivers on its promises,” he said. “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.”