THE Department of Finance (DoF) asked the Senate to find alternative sources of funding for programs that could be affected by the removal of the travel tax.
“The department fully supports the complete abolition of the travel tax. It is important to ensure that any reform is carefully assessed between fiscal and development context,” Undersecretary Karlo Fermin S. Adriano said at a Senate hearing on Tuesday.
Collections from travel tax fund the Tourism Infrastructure and Enterprise Zone Authority (TIEZA), which receives about 50% of the proceeds, followed by the Commission on Higher Education (CHED), which receives 40%, and the National Commission for Culture and the Arts 10%.
“The proposal needs to consider how these programs can be sustainably funded,” he added.
Mr. Adriano said TIEZA could be funded by the General Appropriations Act.
The DoF estimates revenue to be foregone with the abolition of travel tax at between P6.28 billion and P9.34 billion, Mr. Adriano said.
The tax is P1,620 for economy class air passengers and P2,700 from first class passengers flying internationally.
The Senate Ways and Means Committee is considering a number of measures on the future of the travel tax.
Suspending the travel tax was designated as priority legislation for the 20th Congress.
Senator Pilar Juliana S. Cayetano, who heads the panel, said the committee is considering five bills seeking to abolish the travel tax, five bills to exempt Filipinos and ASEAN nationals, and two bills exempting Filipinos traveling in economy class. One bill proposes a senior citizen discount and another would exempt travel vloggers.
“Our work here must strike a balance between removing barriers to mobility and protecting sustainable funds for programs currently supported by this tax,” she said.
Senator Joel J. Villanueva noted that the Philippines is bound by the ASEAN Tourism Agreement for the phasing out of travel levies and travel taxes on nationals of ASEAN Member States traveling to other ASEAN Member States.
“The ASEAN Tourism Strategic Plan likewise emphasizes making cross-border travel more seamless and cost-competitive, and strengthening travel facilitation across the region,” he said at the hearing.
Mr. Villanueva said programs currently funded by the travel tax may be supported via the national budget. — Adrian H. Halili
