SC upholds VAT refunds for foreign tourists

The Supreme Court has upheld the constitutionality of the law granting value-added tax (VAT) refunds to foreign tourists on qualified purchases made in the Philippines.

In a decision written by Associate Justice Amy Lazaro-Javier, the SC dismissed a petition against Republic Act No. 12079, saying it does not violate the Constitution’s equal protection clause.

The law allows non-resident foreign tourists to claim VAT refunds on purchases worth at least P3,000 from accredited stores, provided the goods are taken out of the country within 60 days.

The Court said foreign tourists and Filipino consumers are not similarly situated, making the classification reasonable and consistent with the law’s goal of boosting tourism and local spending.

The SC also noted that VAT refund programs are common in many countries and help keep the Philippines competitive as a tourist destinations.IMT