By Rea Cu, October 24 2018; Business Mirror
Image Credit to Department of Finance
THE Department of Finance (DOF) is looking to establish an electronic invoicing system (e-invoicing) by 2020, which will allow for the implementation of a value-added tax (VAT) refund system for tourists visiting the country.
During the Philippine Hotel Owners Association Inc. general membership meeting at the New World Hotel in Makati City on Tuesday, Finance Secretary Carlos G. Dominguez III told attendees, “Yes we will [set up a VAT refund scheme]; we don’t have the system at the moment, but we are certainly going to do it. And it should be in place some time in two years. There’s a possibility for us to outsource the system but our problem at the moment is we don’t have an e-invoicing system, which we are currently working on.”
In May the Philippine government sought assistance from South Korea to fund some of its big-ticket infrastructure and information- technology projects, including the implementation of an electronic receipt and invoice system, as well as establishing an electronic sales-reporting system.
In a meeting with South Korean Ambassador Han Dong-man, Dominguez expressed hope that at least six Philippine projects in the pipeline will get financing support from the Export-Import Bank of Korea-Economic Development Cooperation Fund (Kexim-EDCF) under the framework arrangement formalized between the two countries on May 4.
Under the arrangement, the Philippines can access South Korea’s loan facility under the EDCF up to an amount not exceeding $1 billion over a five-year period until 2022.
“We have gotten a grant from the Korean government to study an e-invoicing system, and our plan is to put this in place by 2020. So we have a lot of space to do that. We really targeted Koreans because they have a very efficient system which they have developed over at least five years,” he added.
The financing requirement for the implementation of an Electronic Receipt, Invoice and Sales Reporting System that will help the Philippines improve its revenue-monitoring mechanisms is at $41 million, as discussed during a meeting with Korea Deputy Prime Minister and Minister of Strategy and Finance Kim Dong-yeon in Seoul, South Korea, in May.
Apart from assistance for the e-invoicing system, the finance chief pointed out that the government has also asked for assistance from South Korea in line with improving the environment and sanitation in Siargao Island.
“Actually when I was in Korea early this year, I spoke to the finance minister who is also the deputy prime minister there, and I asked him specifically to provide us assistance for the Siargao area in the area of environment and sanitation…. I mentioned that we had a real bad experience in Boracay [Island],” he said.
Based on data from the National Economic and Development Authority (Neda), South Korea is the Philippines’s sixth-largest provider of official development assistance with loans and grants provided to the country amounting to $570.60 million as of December 2017.
South Korea is also among the top sources of foreign tourist arrivals to the country for the past three years, with some 1.6 million South Koreans visiting the Philippines in 2017.