Quimbo says proposal to scrap travel tax will not defund gov't programs

WAYS and Means Committee Chair and Marikina 2nd District Representative Miro Quimbo assured government agencies benefitting from travel tax collections that they will continue to receive funding, as he sought the review and abolition of the nearly 50-year-old law that imposes levy on all outbound travel.

Quimbo is leading the call to revisit the law, originally put in place in 1977 to tax the ultra-wealthy travelers at the time, raising questions about its continued relevance and impact on the country’s competitiveness in the region as a tourism destination.

Under the present law, proceeds from travel tax collections are divided among the Tourism Infrastructure and Enterprise Zone Authority (TIEZA), 50 percent; the Commission on Higher Education (CHEC), 40 percent; and the National Commission for Culture and the Arts (NCCA), 10 percent, to fund infrastructure development, education, and heritage preservation.

With the growing calls to scrap the travel tax for local and foreign passengers departing from the Philippines, however, concerns are raised that the move will affect some programs of these agencies.

“This proposal is not meant to defund important programs,” Quimbo said. “Hindi po natin pagdedebatehan na masisira ang programa dahil hindi tayo papayag doon. Ang sinasabi lang natin is that there is an overall economic benefit when we remove [travel tax] because more people are going to travel.”

According to the veteran lawmaker, the shares of TIEZA, CHED and NCCA will continue to allow them to implement essential programs being funded by the travel tax collections.

The move to abolish the travel tax in the Philippines, the only country in Southeast Asia which is collecting tax from outbound passengers, is gaining ground in the House of Representatives.

While the government stands to lose an estimated PHP7.5 billion with the lifting of the travel tax, it will generate an additional PHP22 billion in terms of income tax because travelers will be earning more, the proponents maintained.

There are more than 7 million Filipinos who travel overseas every year, which Quimbo said is a reflection of rising incomes, increased mobility, and a more globally connected generation.

“Travel is no longer exclusive to the rich. It is now accessible to many, especially the youth,” Quimbo said.

“We must look at the hard data. Will removing it hurt our economy or could it stimulate greater activity?” he said.