Shopping more fun in PH? VAT exemption for tourists sought

Posted at 01/31/2013 5:36 PM

MANILA, Philippines - Shopping may soon be more fun in the Philippines, at least for foreign tourists.

A retailers group is planning to ask Congress to pass a law that will give value-added tax (VAT) exemption to foreign tourists.

Samie Lim, chairman emeritus of the Philippine Retailers Association (PRA), hopes the Philippines will soon follow the lead of many countries who already grant VAT-exemption to tourists.

Many European countries, as well as Singapore, Japan and South Korea, offer tax free shopping for tourists. When their purchases reach a certain amount, tourists can claim a VAT refund before they leave the country.

"It is not right to tax the tourists because they only stay here for a while, so they don’t really make use of the basic services that government gives locals from revenues generated. That is why in other countries, they are VAT-exempt," Lim said.

The Philippines, Lim said, can follow the model of other countries where they hire third-party groups to handle the VAT refunds.

For instance, Globe Blue, the world's biggest VAT refund service, represents more than 270,000 stores in 37 countries.

Lim believes the Philippines will benefit from such a measure since it will encourage tourists to shop more.

Lim is the president and CEO of Automatic Centre, BLIMS Fine Furniture and Canadian Tourism and Hospitality Institute.

He was named PRA President’s Awardee and was given the title "Pioneering Pillar of Philippine Franchising" during the "16th Outstanding Filipino Retailers and Shopping Centers of the Year Awards Night" at the Crowne Plaza Hotel Grand Ballroom in Ortigas.