Senate Minority Leader Aquilino Pimentel III on Monday strongly opposed Senate Bill No. 2415, under Committee Report No. 106, which seeks to implement a value added tax or VAT Refund Mechanism for Non-Resident Tourists.
Pimentel said he recognizes the value of encouraging tourism to stimulate our economy, but he assailed the measure as “misguided.”
Speaking on the Senate floor, Pimentel said the proposed legislation presents significant risks that far outweigh its projected benefits.
Proponents of the bill claimed that the mechanism could lead to an average increase of 148,000 tourist arrivals from 2024 to 2028. It was even argued that a surge in tourist arrivals will result in increased spending by the visitors.
Pimentel, however, noted that these are merely projections and will come at cost. He pointed out the government stands may stand to lose over P4 billion to tourists over the next five years if the bill pushes through.
The Senate Minority Leader questioned the willingness of the government to give away P4-billion of our taxpayers’ money to foreigners, while millions of our own citizens continue to face hardship.
“Imagine the impact of P4-billion if used properly for our countrymen,” he said.
Pimentel said the projected losses could be used to fund social services and other projects for the benefit of the poor and underprivileged. “Better yet, why don’t we reduce taxes that directly benefit Filipinos?” he suggested instead.
The senator said unless we establish a robust mechanism to track actual tourist expenditures and the corresponding VAT paid by them, the proposal remains fundamentally unfair to our kababayans.
Pimentel said the bill lacks the assurance that it will genuinely boost the economy or that VAT refunds will be claimed solely by bona fide non-resident tourists. “We also need to weigh the cost of implementing this refund system,” he pointed out.
He said the Department of Finance might need to engage the services of internationally recognized VAT refund operators. “Is it worth it?” he asked, expressing doubts over the fiscal soundness of the proposed measure.
