Reallocate travel tax to fund infra upgrade

CEBU, Philippines —  The government is being urged to reallocate its travel tax collection to fund the country’s travel infrastructure.

“While the scrapping of the travel tax may lessen the airfare costs, we also do not want to deprive the government of their much needed revenues,” Mandaue Chamber of Commerce and Industry vice president Steven Yu told The FREEMAN when asked about the possible removal of the travel tax.

But more importantly, the business leader wants the travel tax to be spent on modernizing infrastructure like airports.

“What is important is they define where does the travel tax go to. Or sync it with improving travel infrastructure development,” the MCCI official said.

“Again, what we need to improve is the infrastructure. Foreign travels will continue to increase and us being a close neighbor to China is a big plus,” Yu pointed out.

The Tourism Infrastructure and Enterprise Zone Authority (TIEZA) was eyeing to replace the P1,620 travel tax charged to Filipinos flying to other countries with a P500 fee for all, including foreign tourists.

TIEZA chief operating officer Pocholo Paragas was quoted as saying in a July 30 report on The STAR the agency wanted to “revisit the travel tax and make a tourist development fund specifically for departure.”

Under Presidential Decree 1183, passengers who are leaving the country irrespective of the place where the air ticket is issued and the form or place of payment are required to pay a travel tax of P1,620 for economy class and P2,700 for first class.

Paragas had said the P500 fee will go to the Tourist Development Fund (TDF).

Last year, TIEZA was eyeing to create a TDF to be used for the improvement and development of infrastructure for tourists visiting the country.

Currently, travel tax collections go to the Commission on Higher Education (CHED) and the National Commission for Culture and Arts (NCCA).

Under the current travel tax law, TIEZA is in charge of collecting the fees, but only receives 50 percent of the collection, while CHED gets 40 percent and NCCA receives 10 percent.