THE P6.5-billion foregone revenues from the newly-enacted law granting Value-Added Tax (VAT) refunds to tourists can be “easily offset” by the economic impact boosted by tourism spending, the Department of Finance (DOF) said last Monday, hours after the President signed the bill.
THE P6.5-billion foregone revenues from the newly-enacted law granting Value-Added Tax refunds to tourists can be “easily offset” by the economic impact boosted by tourism spending, the Department of Finance said last Monday, hours after the President signed the bill.
Savings from the refund fully channeled into additional tourism spending may boost economic output by P2.8 billion to P4 billion annually. “It’s not a tax leakage. It’s aligning best practices,” Finance Secretary Ralph G. Recto told the BusinessMirror. With the Philippines lagging behind other Asean countries in terms of tourist arrivals, Ateneo de Manila University Economist Leonardo A. Lanzona told the BusinessMirror that additional taxes on tourists could deter visitors, exacerbating the gap between its peers.
“They think that the rationale for trade is always about scale. When in fact, we can focus on selected groups of tourists who are willing to come here even at a higher cost,” he added.
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