Tax law seen to boost tourist arrivals

MANILA, Philippines - Malacanañg hopes to boost the number of tourist arrivals in the country with the signing of a law rationalizing the taxes being paid by international carriers.

Republic Act No. 10378, otherwise known as the Common Carrier’s Tax (CCT) Act, exempts foreign carriers – both air and sea – from paying the three percent CCT.

Carriers will also be exempted from VAT (value added tax) for the transport of passengers.

Deputy presidential spokesperson Abigail Valte said the signing of the law was in addition to the travel and tourism competitiveness report of the World Economic Forum putting the Philippines at rank 82, up from 94.

The International Civil Aviation Organization’s (ICAO) also lifted significant safety concerns in the Philippine commercial aviation industry.

Valte said the CCT collected from international carriers comprised less than one percent of the budget, which would be insignificant compared to multiplier effect of a vibrant tourism industry.

She explained that by foregoing some revenues, international carriers would be encouraged to fly to the country and bring in more tourists.

The administration sees tourism as one sector that can provide livelihood and jobs to people as it does in other countries.

The Philippine Travel Agencies Association welcomed the signing of the law, according to reports, as it will be good for their industry.

Valte said the Civil Aviation Authority of the Philippines was continuously working with the US Federal Aviation Authority and the European Union so local airlines could fly to more destinations in the United States and Europe.

She noted that the infrastructure needed to help tourism is also a priority of the administration.

She said the Department of Transportation and Communication (DOTC) continues to rehabilitate old airports as well as construct new airports.

The Aquino administration targets 10 million foreign tourist arrivals by 2016. Last year, the Department of Tourism launched the “It’s More Fun in the Philippines” campaign to attract more tourists to come to the country.