Finance Secretary Benjamin Diokno said the Philippine government is researching international best practices to determine how best to implement tax refunds for tourists.

During a meeting with the Makati Business Club, Diokno said the government is likely to hire a third-party contractor after President Ferdinand “Bongbong” Marcos Jr. recently approved the tax refund for tourists.

“Right now, we are trying to figure out the most promising modality. What is the global practice? I think it is (through) a third party (contractor that would take) care of the refund,” Diokno said during a meeting with the Makati Business Club.

“Usually, that (is usually implemented) at the airport, instead of the sales level. But we are studying it, and we will implement it in 2024,” Diokno added.

Diokno noted that better tax implementation and computerization could be helpful as the Bureau of Internal Income is looking at ways to increase revenue collection to counteract anticipated losses from tax refunds.

“(The tax system) is not perfect, (but) we can improve upon it. Maybe we will focus on better tax administration (and) computerization,” the Finance Chief said.

“In fact, we did very well. Our revenues were quite high, (which is) relative to our program. That is why we were able to pay our debt,” Diokno added.

Debt-to-GDP down

The Finance Secretary pointed out that the recorded debt-to-gross domestic product ratio for the country as of the end of 2022 is 60.9 percent, lower than the 63.7 percent level during the third quarter of 2022.

Diokno said the debt-to-GDP ratio is below the 61.8 percent goal outlined in the Medium-Term Fiscal Framework.

“That is basically because of the better tax collection and the appreciation of the peso and, of course, the GDP,” Diokno explained in the same event.