P22B gains from travel tax repeal dangled

A lawmaker claimed on Sunday that scrapping the travel tax could generate as much as P22 billion in additional annual government revenue, far exceeding the projected P7.5 billion in foregone collections.

Marikina City Rep. Miro Quimbo, chairman of the House Committee on Ways and Means, cited committee computations in backing the proposed abolition of the levy.

“So that is the overall P7.5 billion that we will lose annually if the tax is removed. Based on our computation, the additional income from income taxes, because businesses will earn more, will reach P22 billion. It is really a no-brainer,” Quimbo said.

The President’s son, House Majority Leader Ferdinand Alexander “Sandro” Marcos of Ilocos Norte, filed House Bill 7443, which has been included in the Legislative-Executive Development Advisory Council’s Common Legislative Agenda.

Under the proposal, the government would remove the current travel tax of P1,620 for economy-class passengers and P2,700 for first-class travelers.

“If we remove the P1,620 from a plane fare, it means more people will be able to travel. That means higher earnings for travel agencies and airline companies. It’s a no-brainer,” Quimbo said.

He noted that lower fares could translate to a 20 percent reduction in ticket prices for popular destinations such as Singapore and Bangkok.

Under Marcos Sr.

He added that the Philippines is now the only country in the Association of Southeast Asian Nations that still imposes a tax on outbound travel.

“We are now the only one collecting a tax for outbound travel in the entire ASEAN. No one else is collecting it,” Quimbo said.

While acknowledging there could be an initial revenue loss, Quimbo said collections over the next 18 months would more than offset the decline.

“The amount that will be collected over the next 18 months will be bigger, and even more than that,” he said.

Quimbo explained that the travel tax was originally imposed during the administration of former President Ferdinand Marcos Sr., when overseas travel was largely limited to wealthy Filipinos.

“But today, everyone travels. So this has become a major obstacle to our countrymen’s ability to travel,” he said.

He added that funds previously earmarked for tourism infrastructure, education-related tourism, and cultural programs are already covered under the General Appropriations Act.