House approves proposal to scrap travel tax

MANILA, Philippines – The House of Representatives voted to abolish the travel tax on Monday, March 16.

A total of 257 lawmakers backed the bill. There was one no vote and one abstention.

The Senate has yet to pass a similar measure, which means the proposal cannot be sent yet to President Ferdinand Marcos Jr.’s desk for his signature.

House Bill No. 8464 seeks to put an end to the travel tax imposed under Presidential Decree No. 1183, as amended, and Section 73 of Republic Act (RA) No. 9593, also known as the Tourism Act of 2009.

Currently, Filipino travelers pay P1,620 for economy-class international trips, and P2,700 for first-class flights.

Congressional efforts to end the fee date back to 2019, with Cebu’s Pablo John Garcia and Aklan’s Teodorico Haresco Jr. filing bills on the subject. The campaign was revived under the current administration when the President’s son, House Majority Leader Sandro Marcos, threw his weight behind a new version of the bill.

The younger Marcos, in filing the bill, said removing taxation on personal travel would encourage more Filipinos to fly out of the country and expand opportunities for cultural exchange.

The Philippines is the remaining country in Southeast Asia that imposes such a levy on travelers.

A travel tax was first introduced during the Ramon Magsaysay administration in the 1950s to deter Filipinos from embarking on luxury travels abroad and to conserve foreign exchange. This meant preventing travelers from buying dollars from the Philippine central bank, as the government preferred to save those bills for essential imports.

In the early 1970s, dictator Ferdinand E. Marcos used travel tax proceeds for peace and order initiatives of his regime. In the late ’70s, the earnings were redirected towards funding national development.

Today, the travel tax no longer intends to discourage foreign travel. RA 9593 states that proceeds shall be divided among the following three agencies:

• 50% to the Tourism Infrastructure and Enterprise Zone Authority
• 40% to the Commission on Higher Education for tourism-related educational programs and courses
• 10% to the National Commission for Culture and the Arts

Under the approved House bill, the national government is tasked to provide the funding that will be removed from these agencies through the annual national budget. – Rappler.com