AmCham bats for airport reform after VAT refund bill approval

By John Victor D. Ordoñez, Reporter

THE American Chamber of Commerce of the Philippines (AmCham) said the Philippines should pursue reforms and improvements to the country’s airports to boost tourism after the Senate approve a bill seeking a value-added tax (VAT) refund mechanism for nonresident tourists.

“A VAT refund (mechanism) for tourists has been successfully implemented in several countries so there is no reason it shouldn’t be successful in the Philippines if properly implemented,” Ebb Hinchliffe, AmCham’s executive director, said in a Viber message.

“However, AmCham has long pushed for airport reform which would have a much better impact on tourism.”

San Miguel Corp. took over operations of the Ninoy Aquino International Airport on Sept. 14 to work on improving the airport’s roads, terminal capacity and to upgrade the passenger experience.

“I think that (VAT refund mechanism) will boost tourism, but if corruption would happen it would be at the airport,” Senator Juan Miguel F. Zubiri said in mixed English and Filipino at a forum on Thursday.

The Senate on Monday approved on final reading a bill that seeks to establish a refund system for goods worth at least P3,000, which aims to boost visitor spending.

Senate Minority Leader Aquilino Martin D. Pimentel III had opposed the bill saying the country should focus on improving the tourist experience and infrastructure, adding that the system could lead to revenue leakages.

Citing a 2018 World Bank study, he said the Philippines has lost about P539 billion in potential revenue due to VAT leakages and exemptions.

Meanwhile, Mr. Zubiri said the government should ensure this refund mechanism won’t be abused since the measure could be prone to corruption.

“I was assured by Senator Sherwin T. Gatchalian, who is our ways and means chairman, that they put enough safeguards because unlike Japan, tourists won’t be able to buy from the point of origin (to avail of the refund) but only in the airport,” he said.

Nonresident tourists will only be entitled to the VAT refund if they buy the products from government-accredited stores within 60 days of their request.