Airlines back removal of travel tax

AIRLINE OPERATORS expressed support for the removal of the travel tax, noting how discontinuing the tax would boost passenger demand and lower the cost of travel.

In a statement on Wednesday, the Air Carriers Association of the Philippines (ACAP) said proposals to remove the travel tax will make international air travel more affordable.

President Ferdinand R. Marcos, Jr. had urged Congress to abolish the travel tax by the time the legislators adjourn in June.

According to ACAP, abolishing travel tax will also enhance the Philippines’ connectivity and global competitiveness.

“ACAP member airlines are gearing up to expand their Philippine-based hub networks in a way that generates economic benefits across the tourism value chain,” it said.

ACAP is composed of flag carrier Philippine Airlines and its regional brand PAL Express, budget carrier Cebu Pacific and its regional brand Cebgo, and AirAsia Philippines.

The Department of Finance said last year that scrapping the travel tax could result in up to P5.1 billion in foregone revenue.

The travel tax was first imposed via Republic Act No. 1478 in 1956 and later amended through Presidential Decree No. 1183 in 1977.

Under the law, 50% of travel tax proceeds go to the Tourism Infrastructure and Enterprise Zone Authority, with 40% supporting the Commission on Higher Education’s tourism-related education programs. The remaining 10% funds the National Commission for Culture and the Arts.

The government collects a travel tax of P1,620 from economy air passengers and P2,700 from first-class ticket holders. Exempt from travel tax are overseas Filipino workers, Filipino permanent residents overseas who stayed less than a year in the Philippines, and children aged two years and below.

Earlier this month, a bill was filed in the House of Representatives to remove the travel tax. A counterpart bill was filed at the Senate last year. — Ashley Erika O. Jose