More airlines from around the world are expected to consider the Philippines as a more attractive destination with the removal of “discriminatory” taxes on foreign carriers.
In a statement, the Board of Airline Representatives (BAR) said the passage of House Bill No. 6022, which aims to remove common carriers taxes (CCT) and gross Philippine billings (GBP), would send signal to the international community that the country was now “truly open to global air business and investments.”
House Bill 6022 was approved on the third and final reading on May 21. Senator Ralph G. Recto, chairman of the ways and means committee, filed a counterpart measure in November last year.
The BAR, which represents the biggest foreign airlines operating in the Philippines, considers both the 3 percent CCT and 2.5 percent GBP as discriminatory taxes that target foreign airlines and give undue advantage to local companies.
“This is indeed positive and exciting news to the international airline community that has been monitoring the progress of the measure,” BAR vice chairman Steven Crowdey said in a statement, referring to House Bill 6022.
He said that because of the Philippine government’s refusal to remove the said taxes in the past, carriers with extensive global networks had either left the Philippines or shifted capacity to the benefit of neighboring countries’ tourism and trade.
“We thank the Aquino administration for the approval of the bill in the Lower House,” he said.
The House and Senate bills were filed following Air France/KLM’s decision to stop flights between Amsterdam and Manila—the last direct link of the Philippines to Europe—due to the alleged discriminatory taxes.
Crowdey said the opening up of the country’s airline industry through the removal of the said taxes would help the Aquino administration achieve its goal of growing tourist arrivals to 10 million by 2016.
“We hope that this bill be certified as urgent by the Office of the President and that the legislative process will be completed under the current Congress,” he said.
“Any increase in capacity by foreign carriers will benefit the domestic and regional networks of Philippine carriers and contribute to generating business opportunities for Filipinos in tourism, aviation and allied services,” the BAR said.—Paolo G. Montecillo