Senate ratifies bill to remove taxes on international carriers, shippers

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Senator Franklin Drilon. INQUIRER FILE PHOTO

MANILA, Philippines – The Senate has ratified a bill that would remove the taxes now being imposed on international carriers and shippers, resulting in more tourist arrivals and lower and more affordable fares.

Under the measure, Senator Franklin Drilon said the 2.5 percent Gross Philippine Billings Tax (GPBT) for carriage of persons and their excess baggage that international carriers and shippers were mandated to pay under the current tax code would be waived, “provided that the home country of these foreign carriers will agree to give a similar tax exemption to Philippine carriers.”

The three percent common carriers’ tax (CCT) being imposed on the passengers and their excess baggage, would not also be applied as proposed in the bill.

“The removal of these taxes will improve the present situation where our tax policies seem to directly contravene our tourism goals,” Drilon  said in  a statement  on Wednesday.

He said the bill, once enacted into law, would result in increased tourist arrival and lower and more affordable fares.

“We hope to spur capacity growth of the passengers’ traffic in our country both in international air transport and sea transport. We are targeting 10 million arrivals by 2016. To be able to achieve this goal, we need available capacity of 15 million seats. But currently, we only have 6 million seats. Therefore, we need nine million seats more,” Drilon said.

“We hope that this bill will be catalyst for capacity growth,” he said.

With the passage of the bill, Drilon said international arrival is expected to increase to 5.55 million in 2013, 6.75 million in 2014, 8.126 million in 2015 and 10 million in 2016.

“The Department of Tourism estimates that the increase in tourist arrivals will generate P455 billion in 2016 and will provide six million jobs,” he pointed out.

The enactment of the bill into law, Drilon said, would also translate traveling costs for overseas Filipino workers who would be enjoying lower fares to the country.

“It will also lower business costs for domestic carriers with foreign operations as soon as the tax exemptions on their gross billings are reciprocated by other countries,” he further said.

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  • http://twitter.com/doncaparros Don Caparros

    I hope that the counterpart bill from the house has been approved already so this can become a law.  Some airline has already discontinued their services to the Philippines because of these taxes.

  • band1do

    Good news.  Now lets fix up the airport and basic infrastructure like public transport and roads.

  • magarito

    pabor ito sa mga ofw.  sana maging batas na ito. kahit linggo linggo umuwi wahahaha.

  • monses

    Why remove tax!Tourist will come because our country has a lot to offer.The government should instead lessen the amount of Value Added Tax on prime commodities and basic services.This way it will benefit more people specially low income families.This is one of the reason why poor people getting poorer.A tax cut should favor only OFW.What an idiot lawmakers

    • band1do

      One of the reasons for the VAT is to help in capturing taxes that aren’t being paid by all. Those who work cash on hand, etc.  

    • http://www.facebook.com/paul.yian Paul Yian

      VAT does not cause poverty. Lack of Education and Employment opportunities do.

    • http://profile.yahoo.com/5ME7HXULKPA63PIZQBBJYSF43A Mary

      the gov’t has a program for the poor families(4P’s)…they are given an amount every month galing sa VAT.

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