House approves VAT refund for tourists, 2 other bills

Tourists continue to flock to Boracay, considered one of the top tourist attractions in the country. — PHILIPPINE STAR/ KRIZ JOHN ROSALES

THE HOUSE of Representatives on Monday approved on third and final reading a bill seeking to grant value-added tax (VAT) refunds for foreign tourists to encourage more visitor spending, as well as the proposed e-Governance Act and reforms to the Official Development Assistance (ODA) Act.

During its Monday plenary session, 304 lawmakers voted in favor of House Bill (HB) No. 7292 that would allow nonresident tourists to obtain a VAT refund on purchases of goods worth at least P3,000. Four lawmakers voted against the measure.

Under the bill, the secretary of Finance, upon recommendation of the Internal Revenue commissioner and the Tourism secretary, is authorized to adjust the threshold based on administrative costs of processing refunds, inflation, and other market conditions.

Bob Zozobrado, president of the Tourism Congress of the Philippines, said a VAT refund scheme will finally put the Philippines at par with Southeast Asian neighbors that have been offering this to tourists for years.

“The multiplier effect of every tourist expenditure is certainly something our industry needs, especially the various micro, small and medium enterprises down the line,” he said in a Viber message.

Ser Percival K. Peña-Reyes, director of the Ateneo Center for Economic Research and Development, said in a phone call that the bill would help the country attract more foreign tourists.

Meanwhile, 304 lawmakers voted in favor of HB 7311 which seeks to leverage ODA with other funding sources, while four voted against.

HB 7311 proposes a “blended financing” framework, allowing private partners to finance the ODA. It seeks to amend the ODA Act of 1996, which is said to restrict bilateral partners, particularly from European companies, from funding ODA projects.

Michael L. Ricafort, chief economist of the Rizal Commercial Banking Corp., said greater flexibility on ODA funding would “allow the use of more government-to-government/multilateral funding sources at much lower costs and at better payment terms.”

He said this measure will also allow increased private sector participation with more capital from local and foreign investors.

Also approved on third reading was HB 7327, which seeks to institutionalize the transition of the government towards “e-governance.” There were 304 lawmakers who voted yes, while four voted against the measure.

Under the proposed measure, the Department of Information and Communications Technology (DICT) must create an E-Government Master Plan which will guide the development and enhancement of all e-government services and processes.

The bill also proposes to create the Philippine Infostructure Management System, a government-owned and -controlled corporation under the DICT to implement infrastructure programs like the National Broadband Plan, Free Wi-Fi for All, and the expansion of the National Government Data Centers and Government Cloud.

If enacted into law, it is expected to enhance the ease of doing business in the Philippines as the government transitions from the traditional person-to-person and paper-to-paper system. — Beatriz Marie D. Cruz

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