DAVAO CITY, Philippines – President Aquino signed here yesterday Republic Act 10374, granting tax relief to international carriers.
RA 10374 provides for the exemption of international carriers from paying 2.5 percent Gross Philippine Billings Tax (GPBT) for carriage of persons and their excess baggage.
The law also exempts international carriers from paying the three percent common carriers’ tax (CCT) imposed on passengers and their excess baggage.
The exemptions, however, apply to foreign air and shipping companies from countries that will also grant similar tax exemptions to Philippine carriers.
The law states that the exemption will be based on “tax treaties or any international agreements or simply based on reciprocity.â€
The President signed the law yesterday during the opening ceremonies of the Meetings, Incentives, Conventions, Events/ Exhibitions Conference (MICECON) 2013 held here at the SMX Convention Center at the SM Lanang Premiere Mall.
Speaker Feliciano Belmonte Jr., Sen. Franklin Drilon and a number of congressmen who co-authored the measure witnessed the signing.
Boost to tourism
The President pointed out that the measure is expected to further trigger the development of the country’s tourism industry.
The President said that the growth of the tourism industry between 2010 and 2011 exceeded the growth between 2001 and 2009.
Tourism Assistant Secretary Benito Bengzon said the new law provides a tremendous boost to the Department of Tourism (DOT)’s efforts to improve international air access and encourage more foreign carriers to fly to the country’s established and emerging tourist destinations.
Presidential spokesman Edwin Lacierda said RA 10374 will reduce the prices of tickets, bring more tourists to the Philippines and generate significant job-creating activity for the tourism industry.
The signing of the law comes on the heels of the International Civil Aviation Organization’s (ICAO) lifting of the Significant Safety Concerns imposed on the Philippines in 2008, in recognition of the country’s efforts to comply with international aviation safety standards.
A few days ago, the Philippines also jumped 12-notches in the Travel and Tourism Competitiveness Report 2013 of the World Economic Forum.
Meanwhile, Aileen Clemente, Philippine Travel Agencies Association (PTAA) president and Tourism Congress member, said they are grateful for the latest development.
The DOT hopes to lure at least 5.5 million foreign tourists this year and 10 million travelers by 2016.
– With Mayen Jaymalin