Rep. Castro hits VAT refund for foreign tourists amid price hikes

House Deputy Minority Leader France Castro on Monday said instead of providing Value Added Tax (VAT) refunds for tourists, the government should repeal VAT and excise taxes on fuel and other basic goods and services.

Castro issued the statement after President Ferdinand "Bongbong" Marcos Jr. approved the VAT Refund Program for foreign tourists by 2024 in a bid to boost tourist arrivals in the country.

According to Malacañang, such policy was based on the recommendation of the Private Sector Advisory Council (PSAC) tourism sector group, and Marcos is set to issue an executive order for its implementation.

"While millions of Filipinos are suffering from high prices of basic goods and services, the Marcos administration prioritizes giving VAT refunds to foreign tourists. Prices of basic goods, especially food items, soared due to the increasing prices of fuel products, [yet] our government continues to refuse to do anything about these," Castro said.

Castro noted that foreign tourists have the sufficient capacity to spend for their vacation and pay VAT, a far cry compared with the significant number of Filipinos affected by the rising prices of basic commodities and absence of decent wage rates.

"Gawin lang sana ng administrasyong ito ang unang hakbang na tanggalin ang VAT at excise tax sa mga produkto ng langis, napakalaki na ang magiging epekto nito sa presyo ng mga pangunahing bilihin sa merkado," Castro said.

Several lawmakers have urged Marcos to suspend VAT on fuel products amid the current economic situation.

At the House of Representatives, the Makabayan Bloc, of which Castro is a member, has filed several bills removing VAT on fuel and oil products, electricity system loss charges, tolls, water, and several others.

"We also filed House Bill 568 Reversing Regressive and Anti-Poor taxation, repealing certain sections of RA 10963 or the TRAIN Act," Castro pointed out.

The bloc has also filed House Bill 258 or wealth tax, which Castro said can generate as much as P469 billion in government revenues.

Aside from Castro, other members of the bloc are House Assistant Minority Leader Arlene Brosas of Gabriela party-list and Raoul Manuel of Kabataan party-list,

Meanwhile, aside from the VAT Refund Program for foreign tourists, other PSAC proposals approved by Marcos were the extension of e-visas for Chinese, Indian, South Korean, and Japanese nationals; and the removal of One Health Pass or requirement of one form only for health, immigration, and customs. —Llanesca T. Panti/KBK, GMA Integrated News