Abolishing the Travel Tax on Filipinos for Economy Passage

TWENTIETH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES First Regular Session ) 25 J3L 14. A0:27 SENATE S. No. - Introduced by Senator Jinggoy Ejercito Estrada AN ACT ABOLISHING THE TRAVEL TAX ON FILIPINOS FOR ECONOMY PASSAGE, AMENDING FOR THE PURPOSE PRESIDENTIAL DECREE NO. 1183, OTHERWISE KNOWN AS THE "DECREE AMENDING AND CONSOLIDATING THE PROVISIONS ON TRAVEL TAX OF REPUBLIC ACT NO. 1478 AS AMENDED AND REPUBLIC ACT NO. 6141, PRESCRIBING THE MANNER OF COLLECTION THEREOF, PROVIDING PENALTIES FOR VIOLATIONS THEREOF, AND FOR OTHER PURPOSES" EXPLANATORY NOTE The 1987 Philippine Constitution recognizes the Filipino people's right to travel. Article III, Section 6 of the fundamental law explicitly ordains that "(T)he liberty of abode and of changing of the same within the limits prescribed by law shall not be impaired except upon lawful order of the court. Neither shall the right to travel be impaired except in the interest of national security, public safety, or public health, as may be provided by law." The travel tax was first imposed in 1956. Its basis was Republic Act No. 1478, as amended, and its purpose was to prevent unnecessary foreign travels and to conserve foreign exchange. It was also meant to promote domestic tourism that required only pesos, not dollars. At first, the tax was a fixed charge based on the cost of the ticket. In a series of presidential issuances, it was amended to travel class whether business or economy.

Currently, Filipino citizens, permanent resident aliens, and non-resident aliens who have stayed in the country for more than one year are subject to travel tax. The rates imposed are as follows!: a. P2,700 for first class passage b. P1,620 for economy class c. P1,350 - reduced rate on first class passage d. P810 - reduced rate on economy class e. P400 - reduced rate on first class passage for dependents of contract workers f. P300 - reduced rate on economy class passage for dependents of contract workers. The travel tax is collected by the Tourism Infrastructure and Enterprise Zone Authority (TIEZA). RA No. 9593 or the Tourism Act of 2009 provides that half of the proceeds from travel tax collection is accrued to TIEZA, while 40% goes to the Commission on Higher Education and the remaining 10% is given to the National Commission for Culture and Arts. Apart from the base fare, Filipinos departing for abroad are required to pay administrative fee or ticketing service charge, fuel surcharge, domestic and international passenger service fee, passenger service charge for national government, and other related fees. Outbound passengers are mandated to pay the travel tax at the airport of departure unless the same has been included in the ticket. The imposition of travel tax is an additional burden to traveling Filipinos wanting spend leisure abroad. At a time when promo fares are rampant to entice Filipino passengers to travel abroad, it is high time to scrap travel tax for economy passengers. Removal of travel tax on economy passengers will encourage more tourists to travel 1 https://tieza.gov.ph/wp-content/uploads/2023/11/TIEZA-Implementing-Rules-and-Regulations-on-Travel-Tax- • pdf

considering that more than half of total air passengers in the country use low-cost carriers. Ultimately, this measure will benefit all Filipino citizens who are currently paying a huge portion of their incomes to the national government via income tax, not to mention the added burden of paying indirect taxes like the value-added tax. In obedience to the Constitution and in recognition of easing the burden of Filipino travelers, immediate approval of this measure is earnestly sought. JINGGOY EJERCITO ESTRADA

Peccarp TWENTIETH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES ) First Regular Session ) JUL 14 AiO :27 SENATE RECEIVIN S. No. - Introduced by Senator Jinggoy Ejercito Estrada AN ACT ABOLISHING THE TRAVEL TAX ON FILIPINOS FOR ECONOMY PASSAGE, AMENDING FOR THE PURPOSE PRESIDENTIAL DECREE NO. 1183, OTHERWISE KNOWN AS THE "DECREE AMENDING AND CONSOLIDATING THE PROVISIONS ON TRAVEL TAX OF REPUBLIC ACT NO. 1478 AS AMENDED AND REPUBLIC ACT NO. 6141, PRESCRIBING THE MANNER OF COLLECTION THEREOF, PROVIDING PENALTIES FOR VIOLATIONS THEREOF, AND FOR OTHER PURPOSES" Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

Section 1. Section 1 of Presidential Decree No. 1183, is further amended to

2 read as follows: "Section 1. There is hereby imposed, in lieu of the travel taxes levied under Section three of Republic Act No. 1478, as amended, and Section six of Republic Act No. 6141, a Travel Tax from all citizens of the Philippines, permanent resident aliens and non-immigrant aliens who have stayed in the Philippines for a period of not less than one year. There shall be based on the fares on the trip from the Philippines and the trip returning on going to the Philippines as well as the fares paid in foreign country in continuation of the trip from the Philippines and the trip returning or going to the Philippines. The Secretary of Finance within sixty (60) days from the approval hereof, shall prepare the Schedule of Travel Tax for

the approval of the President. The schedule of Travel Tax may be amended from time to time by the Secretary of Finance which amendment shall take effect upon approval by the President. The Travel tax under the Schedule shall not exceed the equivalent of fifteen per cent (15%) of the fare involved but in no case shall the tax be less than two thousand pesos for those traveling under first class passage; one thousand two hundred and fifty pesos for those traveling under economy class passage and seven hundred and fifty pesos for all others; provided, however, That NO TRAVEL TAX SHALL BE IMPOSED UPON THOSE TRAVELING UNDER ECONOMY CLASS PASSAGE; PROVIDED FURTHER, THAT subject to the provisions of Sec. 2 (i) and (k) hereof, individuals who are twelve years old or below shall pay only fifty per cent of the tax imposed therein."

Sec. 2. Section 2 of Presidential Decree No. 1183, is hereby further amended

to read as follows: "Section 2. The following shall be exempt from the payment of the travel tax imposed under section one of this Decree - "XXX "(I) PASSENGERS TRAVELING UNDER ECONOMY CLASS PASSAGE."

Sec. 3. Separability Clause. - If any provision of this Act or the application

thereof to any persons or circumstances shall be held unconstitutional, the remainder of this Act and the application of such provisions to other persons and circumstances not otherwise affected shall remain in full force and effect.

Sec. 4. Repealing Clause. - All laws, decrees, proclamations, issuances, or

ordinances that are contrary to or inconsistent with the provisions of this Act are hereby amended, repealed or modified accordingly.

Sec. 5. Effectivity, - This Act shall take effect fifteen (15) days after its

publication in the Official Gazette or in a national newspaper of general circulation.

Approved,