House bill proposes abolition of travel tax

A BILL seeking to abolish the travel tax was filed in the House of Representatives on Monday, with its proponent citing the need to ease the burden on travelers and remove obstacles to mobility.

“The travel tax was created in a very different economic context,” Ilocos Norte Rep. Ferdinand Alexander A. Marcos III, who wrote House Bill No. 7443, said in a statement on Wednesday. “Today, it has become an added cost that restricts mobility and weighs heavily on ordinary Filipinos who simply want to travel for work, family or opportunity.”

A counterpart bill proposing the abolition of travel tax was filed at the Senate last year. All tax measures must originate from the House of Representatives, according to the 1987 Constitution.

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.

Currently exempt from travel tax are overseas Filipino workers, Filipino permanent residents abroad staying less than a year in the Philippines, and children aged two years and below.

“When travel becomes more expensive, fewer people move, fewer people spend and fewer opportunities circulate through the economy,” Mr. Marcos, the President’s son, said. “Lowering the cost of travel allows Filipino families to allocate their money where it matters most.”

The Department of Finance  estimated last year that scrapping the tax could result in up to P5.1 billion in foregone revenue, sparking concerns over the sustainability of government programs that depend on its collections.

The bill proposes that agencies partly reliant on travel tax collections be funded directly through the annual national budget to ensure programs potentially affected will continue.

“It directs the National Government to fund the Tourism Infrastructure and Enterprise Zone Authority, the Commission on Higher Education and the National Commission for Culture and the Arts through the General Appropriations Act,” according to the Marcos bill’s explanatory note. — Kenneth Christiane L. Basilio