TOURISM stakeholders in Cebu expressed support for the plan to replace the P1,620 travel tax on outbound travelers with a P500 tourist fee for all.
“This is a good plan because all tourists will benefit from this. In fact, in other countries, travel tax and other fees are already inclusive (in the airline tickets),” said Carlo Suarez, president of the Hotels, Resort, and Restaurants Association of Cebu (HRRAC).
Tourism Infrastructure and Enterprise Zone Authority (Tieza) Chief Operating Officer Pocholo Paragas was quoted in a report as saying Tieza will “revisit the travel tax and make a tourist development fund (TDF) specifically for departure.”
Paragas said they want the P1,620 travel tax replaced with a tourist fee of P500, which will be charged to both local and foreign tourists.
Fees that will be collected will go to the TDF to fund the improvement of infrastructure for tourists visiting the country.
Airline passengers departing from the Philippines are levied a travel tax of P1,620 for economy class and P2,700 for first class.
Those exempted from paying travel tax are overseas Filipino workers, Filipinos with permanent residency abroad staying in the Philippines for less than a year and infants less than two years old.
While the initiative would lessen the burden of Filipinos traveling abroad and invigorate the travel and tourism flow into and out of the country, Cebu-based travel agent Matt Poonin of Travelite is concerned about where Tieza would get its funds to implement several tourism projects and other operations.
“It’s good for passengers but where will the government (Tieza) get its funding for its projects?” he said.
Under Republic Act 9593 or the Tourism Act of 2009, 50 percent of the travel tax collection will be given to Tieza while 40 percent is allotted for the Commission on Higher Education for tourism-related educational programs, and the remainder will be given to the National Commission for Culture and the Arts.
Tieza proposed last year the creation of the TDF. Under the proposal, it asked the government to scrap the allocation given to Ched and NCCA for Tieza to obtain more funds.
In past interviews, low-cost carrier AirAsia Philippines has already lobbied to the government to scrap the travel tax imposed on outbound travelers.
AirAsia Philippines chief executive officer and captain Dexter Comendador said policies like this are not travel-friendly, especially to Filipinos who travel in groups for a short vacation abroad.
“You haven’t left the country and yet you already spend this much,” he said. “It’s a nuisance taxing our fellow countrymen when they travel.”
Comendador said removing the travel tax could perk up outbound tourism. He said the losses could be offset by making initiatives at the airport that would entice both inbound and outbound guests to spend more.
AirAsia has already submitted their proposal to the concerned government agencies— Department of Finance, Tourism, Trade and Industry and Transportation.
Citing their own study, Comendador said that if the government takes away the travel tax and the airport fee, it will lose roughly P4 billion in five years.
But he said that the country stands to gain P299 billion in terms of tourists coming in, from direct revenues and induced revenues.
According to Mastercard’s Future of Outbound Travel in Asia Pacific 2016 to 2021 report, the Philippines is currently ranked eighth in the top 10 list of fastest growing Asia Pacific markets by international outbound trips.
Outbound travel from the Philippines is estimated at 3.4 million in 2016 and will possibly reach 4.3 million trips by 2021.