Gov’t could offset travel tax losses

A CONGRESSMAN said on Sunday that scrapping the travel tax could generate as much as P22 billion in annual government revenue, countering projections by the Finance department that the move would result in losses.

In a statement, Marikina Rep. Romero “Miro” S. Quimbo said that there may be an initial revenue loss from the first 18 months of cutting the travel tax, but it could be offset by economic activity generated by its removal. The House Ways and Means Committee aims to approve the proposal before the June congressional break, he added.

“Based on our computation, the additional income tax, since they will be earning more, will reach P22 billion,” he said in Filipino.

The government collects a travel tax of P1,620 ($28.35) from economy air passengers and P2,700 ($47.24) from first class air passengers.

“If we remove the P1,620 from a plane fare, it means more people will be able to travel,” Mr. Quimbo said. “That will increase the earnings of our travel agencies and airline companies.”

The Finance department last year projected that scrapping the tax could result in up to P5.1 billion in foregone revenue. — Kenneth Christiane L. Basilio