No more foreign carriers tax by Feb – Drilon

MANILA, Philippines – Foreign carriers flying to the Philippines will get a long-awaited relief from high costs in February when a measure removing taxes on them is expected to take effect, Senator Franklin Drilon said Wednesday, January 23.

The Senate approved the bicameral conference committee report removing the 3% common carriers tax.

The measure also seeks to waive the 2.5% gross Philippine billings tax on international airlines and shippers provided that their home countries give the same tax exemption to Philippine carriers.

“The measure will be effective by the middle of February. We will have it ratified by both Chambers this week. Next week, the enrolled copy will be endorsed to the President for signing. After signing, it will take effective 15 days from the day of publication,” said Drilon, ways and means committee chairman and sponsor of the Senate version of the measure.

The measure will help the Philippines achieve its target of attracting 10 million tourists by 2016, said Drilon, noting the country remains the only one imposing such taxes on foreign carriers.

“We are targeting 10 million arrivals by 2016. To be able to achieve this goal, we need available capacity of 15 million seats, but, currently, we only have 6 million seats. Therefore, we need 9 million seats more. We hope that this bill will be catalyst for capacity growth,” he said.

In April this year, the Philippines lost its last direct flight to Europe after the airline operating it left because of high taxes. Air France-KLM scrapped its Manila-Amsterdam route, saying it was “absolutely not happy” with the regulatory environment in the Philippines. – Rappler.com