Air Carriers Tax Review Urged

A Visayan congressman is calling on the Aquino government to rationalize the taxes imposed on international air carriers operating in the country, warning that the “onerous tax regime” would harm the country’s tourism industry.

Iloilo Rep. Jerry Treñas, chairman of the House Committee on Good Government and Public Accountability, said the Common Carriers Tax (CCT) which is three percent of the airline's gross turnover and the Gross Philippine Billings (GPB) tax, which is two percent of the gross turnover should be rationalized as he sought the passage of House Bill 4444, which exempt international airlines from paying such taxes.

“Our onerous tax regime is driving away tourists from the country. A tourist lost means lost jobs and revenues for the BIR,” Treñas said, citing that based on 2009 data, international tourists contribute at least $2.3-billion in export receipts.

“Without a healthy airline industry, Philippines tourism will never flourish,” Treñas stressed.

He even attributed to the declining number of airlines operating in the country to the government’s tax regime.

The lack of nonstop services also negatively impacts airfreight, penalizing existing and potential exporters of electronics, fashion items, seafood and vegetables, he noted.

“All the incentives granted under the Tourism Act of 2009 to increase the country’s capacity to generate investments, employments and reduce poverty will simply be rendered worthless. The same is true for all the other government plans to develop export industries and services,” the House leader said.

Treñas said HB 4444 seeks to keep Philippine tourism, trade, employment and economic integration on par with the rest of the world, eliminating the negative impact of CCT and GPH on Philippines’ international connectivity and competitiveness as an international investment destination.

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