Return of travel tax to PTA okayed on 2nd reading

Congress has approved on second reading the House tourism and ways and means committees’ bill pushing for curative legislation that would return to the Philippine Tourism Authority (PTA) half of travel tax collections allocated to the Commission on Higher Education (CHED).

In pushing for the travel tax measure in her sponsorship bill, Aklan Rep. Gabrielle Calizo cited the need for the government to stabilize financial resources for tourism and maximize the industry’s potential as an engine for economic growth.

"In reallocating the travel tax collection proceeds, we aim to rationalize the use of resources to maximize tourism growth in the country as a major contributor to national progress and economic development, especially in the countryside where the vast tourism potential remains untapped," Calizo said.

Calizo said the travel tax measure, which will gradually reduce CHED’s share from the travel tax collections from the present 40 percent to 20 percent, has the full backing of the Legislative-Executive Development Advisory Council (LEDAC).

The measure, a consolidated version of House Bills 1674, 3365 and 3867, also dovetails with the tourism action agenda of the National Socio-Economic Summit held last year by the executive, legislative and judiciary with representatives from business and labor.

Calizo also stressed the urgent need to augment the PTA’s share of travel tax collections "to fund tourism promotions and infrastructure programs, including social tourism projects of countryside districts."

She lamented that only a fraction of the travel tax collections is actually being utilized for tourism purposes since a chunk of the tax proceeds have been reallocated to various government agencies by past legislation.

When the PTA was created in 1973 as an infrastructure arm of the Department of Tourism by virtue of Presidential Decree No. 189, it was also given the special function of collecting travel tax which was to be used exclusively for tourism development.

However, through the years, several laws were passed that allocated funds to various government agencies from the travel tax collections. One of these laws was Republic Act 7356, which created CHED.

Thus, at present, the PTA only gets 27 percent of the total travel tax collection. The PTA shares the tax proceeds with CHED which is appropriated 40 percent, the National Treasury which receives 23 percent, and the National Commission on Culture and the Arts (NCCA) which gets 10 percent.

For this year, the projected collections from travel taxes are to be appropriated to these agencies as follows: PTA, P529 million; National Treasury, P208 million; NCCA, P148 million; and CHED, P592 million.

Under the proposed scheme, Calizo proposes a gradual return to the PTA of half of the 40 percent travel tax share of CHED. Ten percent will be returned to the PTA on the first year, and the rest the following year.