Senate OKs bill removing foreign carriers tax
MANILA, Philippines - The Senate approved on third and final reading Wednesday, December 19, the bill that seeks to remove taxes imposed on foreign carriers to help attract more tourists into the country.
Voting 16-0, the Senate approved Senate Bill 3343, which seeks to exempt international carriers and shippers from paying the 3% common carriers tax and the 2.5% gross Philippine billings tax on condition of reciprocity.
This means the taxes will only be waived when home countries of foreign carriers also give the same tax exemption to Philippine carriers.
Senator Franklin Drilon, acting ways and means committee chairman and sponsor of the Senate version of the bill, said the measure was approved after President Benigno Aquino III certified it urgent.
The certification allowed Congress to do away with the 3-day rule between the second and third readings of the bill.
The approval of the Senate version came 7 months after the House of Representatives passed its counterpart version on third reading.
A bicameral committee will meet next year to reconcile the two versions.
Removing the carriers tax will help the Philippines achieve its target of attracting 10 million tourists by 2016, said Drilon, as the country remains the only one that imposes such taxes on foreign carriers.
"There is an urgent need to address this very serious matter to avert undue escalation. We should dissuade the few remaining foreign carriers operating locally from transferring to other countries," he said.
In April this year, the Philippines lost its last direct flight to Europe after foreign airline Air France-KLM stopped its Manila-Amsterdam operations.
The airline said it was "absolutely not happy" with the regulatory environment in the Philippines, citing in particular the high taxes and excessive fees levied on it locally.
The Department of Tourism expressed concern over the move and urged Congress to address the issue.
It said the tax problem has endangered the billions of pesos of income and million of jobs that the tourism sector is expected to generate in the coming years. - Rappler.com