Quimbo: Scrapping travel tax could yield ₱22B annually for gov’t

The Philippine government could generate as much as ₱22 billion in additional annual revenue if the travel tax were abolished, Marikina City 2nd District Rep. Romero Federico Quimbo said Sunday.

Quimbo said that while scrapping the tax would result in an initial revenue loss, increased travel activity would stimulate economic activity and ultimately boost income tax collections.

“Pag bawasan po ‘yan ng 20%, mas maraming tao ang makakabiyahe, kaya dadagdag ang kikitain ng ating travel agencies at airline companies. ‘Yun ang overall na epekto kapalit ng mawawalang humigit-kumulang ₱7.5 billion kada taon kung tatanggalin ito,” he said in an interview on Super Radyo dzBB.

(If that is reduced by 20%, more people will be able to travel, increasing the income of travel agencies and airline companies. That is the overall effect in exchange for the roughly ₱7.5 billion lost annually if it is removed.)

Quimbo, who chairs the House Committee on Ways and Means, said the projected increase in economic activity could translate into higher tax collections within about 18 months.

“Sa computation namin, ‘yung dagdag in terms of income tax aabot ng ₱22 billion,” he said.

(Based on our computation, the increase in income tax revenue could reach ₱22 billion.)

He noted that airfare to nearby destinations such as Singapore and Bangkok can range from ₱8,000 to ₱9,000, suggesting that lowering travel costs could encourage more Filipinos to fly abroad.

Under House Bill No. 7443, House Majority Leader Alexander Sandro Marcos proposed abolishing the travel tax imposed on Filipinos traveling overseas for leisure, arguing that the levy has outlived its purpose.

The measure is among the priority proposals being considered in the House of Representatives of the Philippines, with lawmakers aiming to transmit it to the Senate of the Philippines before the first regular session of Congress adjourns in June.—MCG, GMA Integrated News